NEW YORK (Reuters) - Charter Communications Inc CHTR.O, the fourth-largest U.S. cable company, is not a cheap acquisition target, the chief financial officer of Time Warner Cable Inc (TWC.N: Quote, Profile, Research, Stock Buzz) said on Monday.
"Charter is an example of a situation when you really have to look at more than the stock price," CFO Rob Marcus told the Reuters Media Summit in New York, when asked about rumors that Time Warner Cable may buy Charter.
"Even today at the level they're trading -- at pennies essentially -- (Charter) is still trading at an enterprise value that is probably double the enterprise value of Comcast or Time Warner Cable," Marcus said. "So that tells me it's not cheap at all."
Analysts have named Time Warner Cable, the second-largest U.S. cable company, which is in the process of separating from Time Warner Inc (TWX.N: Quote, Profile, Research, Stock Buzz), as the most likely buyer for Charter.
Buying Charter would help Time Warner Cable compete better against Comcast Corp (CMCSA.O: Quote, Profile, Research, Stock Buzz), the largest U.S. cable company.
Shares of Charter, in which Microsoft Corp (MSFT.O: Quote, Profile, Research, Stock Buzz) co-founder Paul Allen owns a controlling stake, were trading at 18 cents, down more than 1.2 percent, in morning dealings on the Nasdaq.
Marcus said any potential acquirer of Charter would also have to take on the U.S. cable company's large debt load.
"One of the issues, the thing that's really precluded in any transaction in spite of the fact that they've been rumored to be looking for a buyer for several years, is that they've got debt leverage levels that actually exceed what the top-tier cable companies are trading at on an enterprise value basis," Marcus said.
Charter said in regulatory filing in March that it had received several informal inquiries about a potential investment or transaction involving the company.
Last month, Charter posted a third-quarter net loss of 86 cents per share but said revenue rose nearly 8 percent.
(For summit blog: summitnotebook.reuters.com/)
(Reporting by Anupreeta Das, editing by Matthew Lewis and John Wallace)
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