Unnamed insider sources tell Bloomberg that Charter Communications (CHTR) is preparing a takeover bid for Time Warner Cable (TWC). The report sent TWC shares surging more than 4% in Friday pre-market trading.
Charter, which is controlled by telecommunications mogul John Malone, made informal merger overtures to TWC in May, but the TWC rejected the terms of the offer as insufficient.
Now, Charter is said to have teamed with Goldman Sachs (GS) to launch a new bid for the company. Malone, who is worth an estimated $6.8 billion and owns 27% of Charter, is said to be exploring a variety of financing options for an acquisition.
However, TWC has a market value of $33.1 billion, compared to just $12.6 billion for Charter, an imbalance that could complicate any bid.
Malone has said that the cable industry would benefit from consolidation.
Shares of Charter Communications were flat in Friday pre-market trading.