Time Warner Cable's Reasons for Holding Out

People who want to buy companies generally have to pay an average share price higher than the current market price. John Malone is no exception.

Charter Communications says that it wants to buy Time Warner Cable, but it's going about it in a very odd way. Normally, prospective acquirers offer to pay a premium of about 20 percent to 30 percent of the current market price. Charter offered shareholders of TWC a premium roughly equal to zero. No wonder TWC's boss called the bid a "low-ball offer." He would be nuts not to insist on more.

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