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Charter to Start Meetings With Time Warner Cable Shareholders

Charter Communications Inc. executives are planning to begin meeting with Time Warner Cable Inc. shareholders today to convince them to support their $61.3 billion takeover offer.

“To date we have not engaged directly with Time Warner Cable shareholders out of respect for the process and Time Warner Cable’s management and the board,” Alex Dudley, a spokesman, said in an interview. “But their unwillingness to engage leads us to conclude that we have to take our case directly to shareholders. We are doing that post-haste.”

Time Warner Cable’s largest shareholders include Dodge & Cox Inc., Capital Group Cos. and T Rowe Price Group Inc. Stamford, Connecticut-based Charter, as part of its appeal to Time Warner Cable shareholders, held a conference call with analysts yesterday during which executives reiterated the merits of combining the two companies.

Chief Operating Officer John Bickham referred to what he described as Time Warner Cable’s operational failures, citing rising subscriber losses and less than optimal investment in the company’s network.

“Time Warner Cable has had a failed operating strategy that is revealed by the fact they are losing video customers at an accelerated rate,” Bickham said. “This negative momentum isn’t simply the result of their operating plan over the last year -- it is the failed plan over the last half-decade.”

‘Grossly Inadequate’

Time Warner Cable, based in New York, responded that there was nothing in Charter’s presentation and call yesterday “that changes the fact that its proposal is grossly inadequate,” according to a statement. “We are confident in our standalone plan and we are not going to let Charter steal the company.”

Time Warner Cable Chief Executive Officer Rob Marcus called Charter’s $132.50-a-share bid a “low-ball offer” in an interview Jan. 13. The proposal included $82.54 cash per share and $49.96 in stock, or 0.372 Charter shares, according to Charter’s presentation yesterday. Excluding debt, the deal would be worth about $37.3 billion.

Charter, the fourth-largest U.S. cable company, rose 2.3 percent to $137.34 in New York yesterday. Time Warner Cable, the second-largest U.S. cable provider, rose 2.7 percent to $136.

Time Warner Cable shareholders may be satisfied with an offer of $140 to $150 a share, according to price estimates compiled by Bloomberg from stock owners and analysts.

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