Charter Communications would consider buying subscribers that Comcast could divest as part of its proposed Time Warner Cable takeover, Greg Maffei, chief executive of Charter's largest stakeholder, Liberty Media, said on Friday.
These were Liberty Media's first comments since Charter Communications (CHTR.O), in which it has a 27 stake, lost out on acquiring Time Warner Cable TWC.N to Comcast. Although Comcast, the top U.S. cable operator, had always been intrigued by the idea of buying Time Warner Cable, a deal was not on its list of priorities until Charter put it in play last summer.
Maffei told a conference call that Charter could still go after Time Warner Cable if regulators reject the Comcast deal, although he expects it to win approval, though perhaps with "onerous conditions."
Maffei said he thinks the Comcast-Time Warner Cable deal will ultimately be approved by regulators but said if the deal were to fall through, Liberty and Charter Communications (CHTR.O) are leaving the option on the table of acquiring Time Warner Cable.
Maffei said he wants Liberty and Charter to be "flexible both for acquisitions of other systems or potentially the divestitures out of Time Warner or if the Time Warner deal is not able to be completed -- looking back at the whole thing," he said.
Comcast has said it is willing to divest 3 million subscribers.
While Charter, driven by Liberty Media, missed out on acquiring Time Warner Cable, Maffei did not rule out further cable deals.
"We certainly learned in this process that there were many investors who are interested in investing in cable consolidation either with Charter or alongside Liberty. And I suspect if a need arises for additional equity for a cable consolidation play, we'll see a lot of interest," he said.
Liberty last month offered to buy out Sirius XM's minority shareholders in a deal that could be worth more than $10 billion. The deal would make the entire asset part of Liberty's portfolio and take the public shares off the market.
Liberty currently owns more than half of Sirius XM.
Shareholders such as consumer advocate Ralph Nader have spoken out against the deal, an offer of $3.68 per share that provides little premium to shareholders. Sirius XM shares were trading at $3.62 per share on Friday.
Liberty said it still wants to go through with the deal and use Sirius XM's cash for share repurchase or strategic acquisitions.
Maffei said Liberty was in touch with Sirius XM's special committee, which is studying the offer. While he suggested there could be a bit of room for Sirius XM's committee to negotiate a higher price, he said that a deal does not have to get done and in terms of price, "there certainly are limits to what would be appealing."
Maxim Securities analyst John Tinker said that Maffei is in full negotiating mode and "is very clear that at a certain price they don't need to do the deal."
(Reporting by Liana B. Baker; Editing by Stephen Powell and Meredith Mazzilli)