Time Warner Cable Said to Get Takeover Approach From Altice

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Photographer: Michael Nagle/Bloomberg

Time Warner Cable Inc., whose merger with Comcast Corp. was called off last month, has received a takeover approach from French billionaire Patrick Drahi’s Altice SA, a person with knowledge of the matter said.

Deliberations on a deal are at an early stage and may not result in an agreement, the person said, asking not to be identified as the information is private. Time Warner Cable’s market capitalization is about $45 billion, while Altice has a value of $34 billion.

Drahi, 51, is seeking to expand his telecommunications empire to a U.S. cable market that is being quickly reshaped by a series of mergers. Altice, Drahi’s holding company, said on Wednesday it agreed to buy most of Suddenlink Communications in a deal that values the seventh-largest U.S. cable company at $9.1 billion including debt.

Representatives for Time Warner Cable and Altice declined to comment. Reuters reported the approach earlier Tuesday, citing an unidentified person.

Shares of Altice rose 7.3 percent to 124 euros at 9:08 a.m. in Amsterdam. Time Warner Cable added 0.3 percent to $158 in New York on Tuesday.

Altice is buying 70 percent of Suddenlink to add about 1.5 million customers in states including Texas, West Virginia, Louisiana, Arkansas and Arizona. BC Partners and CPP Investment Board will retain a 30 percent stake in Suddenlink.

European Tycoon

Comcast, the biggest U.S. cable company, dropped its plan to buy Time Warner Cable, the No. 2, in the face of regulatory hurdles. Meanwhile, Charter Communications Inc., which ranks fourth, is working on a takeover of Bright House Networks LLC, the No. 6. Many analysts also anticipate a merger between Charter and Time Warner Cable.

Drahi, who splits his time between Paris, Geneva, and Tel Aviv, is among the most influential telecommunications tycoons in Europe. The U.S. would mark new territory for the billionaire, a dual French and Israeli citizen whose parents were math teachers and who prefers getting around on a bicycle.

Last year, Altice bought French wireless provider SFR and merged it with its own cable operator Numericable, predicting synergies valued at more than 10 billion euros from the deal. The combined Numericable-SFR reported a 5 percent slide in 2014 revenue, underscoring the need to reduce expenses following the merger as prices drop in the highly competitive French market.

France Setback

Early this year, Altice was stepping up plans for a potential takeover of smaller mobile carrier Bouygues Telecom to further cement its position in France, people familiar with the matter said at the time. Bouygues SA Chief Executive Officer Martin Bouygues said last month the company’s phone division isn’t for sale.

Moroccan-born Drahi’s first cable venture was a tiny operator founded 20 years ago in the village of Cavaillon in southern France. Throughout the 1990s Drahi bought and sold cable companies, deals that eventually led to the creation of Numericable, alongside buyout firm Cinven Group Ltd. Carlyle Group LP invested in 2007 in Numericable, now France’s largest cable provider.