UPDATE 1-Time Warner Cable gets new CEO as industry ponders deals
July 25 (Reuters) - Time Warner Cable Inc's longtime chief executive and chairman, Glenn Britt, will step down at the end of the year and be replaced by Robert Marcus, the company's second in command.
The move was widely expected. Britt, 64, has been CEO since 2001. Marcus, 48, will become CEO and will join the company's board of directors as chairman starting Jan. 1. He was promoted to chief operating officer and president in 2010. There are no immediate plans to replace him as president.
Britt said in an interview that he had known Marcus for two decades and identified him as a successor four or five years ago.
The executive shuffle comes as just as Time Warner Cable, the second largest U.S. cable provider behind Comcast, with 12 million customers, has become an acquisition target for John Malone, chairman of Liberty Media Corp.
Malone, whose media holding company has an investment in cable provider Charter Communications Inc, made an offer for the company, but it was rejected because it was not viewed as beneficial to Time Warner Cable shareholders, Reuters previously reported.
Marcus on Thursday declined to comment on Malone or consolidation.
The change at the top will not minimize Malone's interest in the company, according to Wunderlich Securities analyst Matthew Harrigan.
"I certainly do not think that it calls off the dogs on interest from Charter and John Malone," Harrigan said.
Marcus, who earlier in his career was an attorney focused on mergers and acquisitions, said Time Warner Cable's philosophy on deals will stay the same. Time Warner Cable purchased Insight Communications, a Midwest cable operator, for $3 billion in 2011.
"With the exception of the Insight transaction and some smaller deals, we've generally concluded that the better value creation opportunity was in buying back our own shares," said Marcus. "The same principles will continue to guide us."
Moffett Research analyst Craig Moffett said Marcus' biggest challenge will be to navigate through consolidation discussions.
"Wall Street has high regard for Rob Marcus," Moffett said. "But Time Warner Cable's stock, at the moment of transition, prices in a relatively high expectation of consolidation with Charter, and that makes his path forward much more complicated."
Time Warner shares are up 21 percent this year.
CHANGING OF THE GUARD
Moffett said one of Britt's biggest achievements was being among the first executives to reposition broadband Internet as cable's primary product.
Marcus said investors should not expect any "fundamental near term changes" under his leadership. He wants to "redouble our focus on keeping the customer at the center of everything we do" and help remind consumers of the value of the company's products.
Marcus, who once was the company's finance chief, added that he wants to foster a more performance oriented culture at the company and will work hard to increase the "competitive spirit" as the cable industry faces more rivals than ever.
Business services will also be a focus. Marcus wants to change the perception that cable is just about serving homes with video and Internet now that business services is the company's fastest growing segment, increasing its revenue by double digits each quarter.
"What is really the biggest driver of growth of our business often gets ignored," he added.