Jan 24 Charter Communications Inc has
hired proxy solicitor Innisfree M&A as it gears up for a
potential proxy fight at takeover target Time Warner Cable Inc
, according to people familiar with the matter.
Charter is looking to nominate a new slate of directors to
replace Time Warner Cable's board after the larger rival
rejected its $37.3 billion unsolicited takeover bid.
The one-month window to nominate a new slate expires in
mid-February for the annual shareholder meeting in May.
Charter and its largest investor Liberty Media Corp
are searching for candidates, the people said on Friday, asking
not to be named because they were not authorized to speak with
Representatives for Charter, Liberty Media and Time Warner
Cable declined to comment on Friday. Innisfree could not be
immediately reached for comment.
While bankers and lawyers put together mergers, proxy
solicitors help companies or major investors persuade
shareholders to accept or reject those deals. They are
responsible for identifying companies' shareholders and devising
messages to help sway their votes.
Their role is most important in situations like proxy
fights, where shareholders are to vote on competing slates of
Charter is wrapping up a two-week road show, holding
meetings with Time Warner Cable shareholders all over the
country. On Thursday, T. Rowe Price, a large investor in both
Time Warner Cable and Charter, sent a letter to Time Warner
Cable urging the two companies to talk.
During these meetings, shareholders have expressed interest
in a deal in the mid-$140s per share range, people familiar with
the matter said. Charter's offer on Jan. 13 was $132.50 in cash
Time Warner Cable's executives and board insist that the bid
is too low and are seeking a deal at $160 or higher. Time Warner
Cable shares have been trading above Charter's offer price,
closing at $133.70 on Friday.
Time Warner Cable's reluctance leaves Charter with the
option of raising its bid to get a deal done on a friendly
basis, or launching a proxy fight to force a deal through,
UBS analyst John Hodulik said Time Warner Cable may face
shareholder pressure if Charter raises its bid, even at a price
"We believe Time Warner Cable is in danger of losing a proxy
fight were it to hold fast to the $160 number in the face of a
bid from Charter in the $140s," Hodulik said in a research note
He expects that in a proxy fight, Charter could put forward
a slate of new directors to replace the board of Time Warner
Cable, which has 13 members including Chief Executive Rob
Innisfree is one of the top advisers on shareholder votes in
hostile situations. It advised Airgas Inc to fend off a
hostile takeover from Air Products & Chemicals Inc in 2010 and
2011, a situation that mirrors Time Warner Cable's current
tactics. [ID: nL2N0KW0WW]. Time Warner Cable is working with
proxy solicitor MacKenzie Partners Inc.