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3 Top Buyout Targets for 2014

These stocks could be big winners in an accelerating M&A environment

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Buyout Target: Time Warner Cable (TWC)

buyout-TWC-stock52-Week Stock Performance: +37%
Market Cap: $38 billion

Time Warner Cable (TWC) — the nation’s No. 2 cable company after Comcast (CMCSA) — is high on traders’ buyout wish list, and they just might get what they want in 2014.

Cable companies are still somewhat regional businesses, and the industry needs further consolidation to improve its negotiating position with heavyweight media companies like Walt Disney’s (DIS) ESPN.

Time Warner Cable would be quite a prize, and it doesn’t have a single large shareholder to block or complicate a buyout offer. More importantly, it has a voracious and relentless pursuer.

Cable mogul John Malone has taken a 27% stake in Charter Communications (CHTR) with eyes on TWC. Indeed, reports have Charter readying a buyout proposal worth $140 a share.

It gets better. Rivals like Comcast aren’t likely to sit still while a competitor tries to buyout Time Warner Cable. That raises the chances for buyout bidding war. Either way, TWC should trade higher on buyout speculation — and the eventual buyout, too.

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