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NEW YORK (Reuters) - Charter Communications Inc is discussing raising its bid for Time Warner Cable Inc as soon as in the next two weeks, according to people familiar with the matter, a move that could pressure its reluctant rival ahead of a proxy deadline.
Charter is considering a higher bid in the low $140s per share range, the people said on Friday, up from its current $132.50 per share offer that values the second-largest U.S. cable operator at $37.3 billion based on shares outstanding.
A new price at around $142.50 per share has been discussed, but no decision has been made, one of the people added. The likely bump reflects feedback from Time Warner Cable investors Charter has received in its two-week roadshow, that person added.
Time Warner shares were up 2 percent in after-hours trading at $136 following Reuters' report on the higher bid possibility. Time Warner shares have surged 49 percent over the past year, compared with a 19 percent gain in the S&P 500.
While timing of any new bid has yet to be decided and may change, Charter could sweeten its offer before, or at the same time it nominates a slate of directors for Time Warner Cable's board, people familiar with the matter said.
The one-month window to nominate a new slate expires in mid-February for the annual shareholder meeting expected in May.
All the people asked not to be named because the matter is not public. Representatives for Charter, Comcast and Time Warner Cable declined to comment.
With no rival bidder for Time Warner Cable in sight, Charter may also hold out on a sweetener until after it nominates a slate, one of the people said. It could also wait until it reaches an agreement with Comcast Corp about carving up Time Warner Cable, the person added.
Charter and Comcast are in discussions about how to carve up Time Warner Cable's markets, the people familiar with the matter said on Friday.
Comcast is interested in owning Time Warner Cable's systems in New York City and in parts of New England such as Maine, but has little interest in Los Angeles, another of Time Warner Cable's largest markets, Reuters previously reported.
The deal could also involve some Charter-owned systems going to Comcast, such as Worcester, Massachusetts, the people said.
Under the proposed deal, Comcast would buy the cable systems from Charter if Charter succeeds in acquiring Time Warner Cable. The details and timing of a potential agreement remain unclear.
UBS analyst John Hodulik said in a research note on Friday that a bid of $140 to $145 would be necessary to get support from Time Warner Cable investors.
"We would expect Charter to move forward with plans for a proxy fight but believe a new, higher bid may come given the support it would have from Time Warner Cable shareholders and our modeling that suggests ample value for both sides," Hodulik said.
Reporting by Liana Baker and Soyoung Kim in New York; Editing by David Gregorio and Lisa Shumaker