Charter Rises as Europe Deal Talk Stokes Cable Company Values

Charter Communications Inc. (CHTR) rose the most in more than a year after Liberty Global Inc.’s interest in buying Virgin Media Inc. stoked valuations for U.S. cable companies.

Charter, the No. 4 in the market, climbed 6.3 percent to $81.53 at the close in New York, the largest gain since Aug. 9, 2011.

Many large U.S. cable companies are undervalued relative to their European counterparts, Matthew Harrigan, an analyst at Wunderlich Securities Inc. in Denver, said in an interview. Investors may see Charter as a possible acquisition target, said Amy Yong, an analyst at Macquarie Securities who has a neutral rating on the shares.

Comcast, the largest U.S. cable company, jumped 2.7 percent to $39.24, compared with a 1 percent gain for the Standard & Poor’s 500 Index. DirecTV (DTV), the second-largest U.S. pay-TV provider, rose 2.3 percent to $52.37. Cablevision, the fifth- largest U.S. cable company, increased 3.1 percent to $14.61.

Hedge fund Lone Pine Capital LLC, run by Stephen Mandel, announced yesterday in a Securities and Exchange Commission filing it owned 7.1 percent of Charter, which also may be lifting the shares, Yong said.

Through yesterday, Charter had fallen 6.1 percent from Jan. 30, the day before Time Warner Cable Inc. (TWC)’s 2013 forecast trailed analyst estimates. The S&P 500 fell 0.4 percent in the same period.

Liberty Global is in talks for a deal with U.K.’s Virgin Media Inc., and a transaction is expected to be announced as soon as today, two people familiar with the talks said.

To contact the reporter on this story: Alex Sherman in New York at asherman6@bloomberg.net

To contact the editor responsible for this story: Nick Turner at nturner7@bloomberg.net

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