Dec. 11 - Richard Beales and Jeffrey Goldfarb showcase the latest Breakingviews calculator, which imagines Time Warner Cable turning the M&A tables on smaller rival Charter.
▲ Hide Transcript
▶ View Transcript
So the way it is Time Warner Cable at 37 billion dollar cable TV company. Is in play one of the seats is this -- speech -- the communications. A smaller company trying to borrow it may be 25 billion dollars to help it -- it by Time Warner Cable if you've been looking at. This idea of turning the tables with a -- you know I just had a fake out earlier we just had happened with men's warehouse -- kind of right maybe -- work in this situation to -- of the company buys this -- exactly because what would happen is that you would want to have a lot less debt because buying smaller companies even if they were to borrow some money it. That would be a lesson that a company but keep all the benefits of the deal. -- -- -- -- -- -- -- -- -- -- -- -- -- -- -- -- Putting companies like this together Tennessee and -- -- a run up next both companies -- -- -- -- -- -- on the table -- the problem with this using your target you. Says -- gonna go up and and agreed to acquire they can get down there you've you've kind of been running in them as a get out of life is simple. Right rules -- -- in this case was that you know talk belong to him in autumn and artistic and charter march. And both stocks going up almost -- forty some odd percent since then but in expectation of a deal and have synergies that we. You have to aggressively when it votes -- this -- -- was -- be -- once someone's while to but suddenly it went right that's supposed to you know if you take a look here what we what we started out with those ideas because the stock has run out so much says it. Assume that they don't pay any premiums there's already a big premium built into the stock up. Maybe they fund have to deal with stock half with that. You've soon sort of over a billion dollars -- synergies and you know you put the combined company animal or seven and a half. And so you get is you know a nice little premium to time the current Sampras Islam that is that this would. Might be worth it things and more of the Time Warner. Word of -- right with a buy Canada. I mean my first question would be well wine and premium Vietnamese at the grand but only have to pay premiums written it but people complain that yeah. Yeah W -- so let's assume that there is a 15% premium instead of 0%. And then you might even assume are right now because of all the students both stocks are trading at higher than eight times that it does so you're very conservative that the -- and it goes today. And and you see even in that scenario. You know you get even higher agreement if you think the locals going to be the pregnant as a pretty bright you can -- all those numbers trying to figure out you know what we're. And when it does tell you is there are some other factors that you want to think about you know not just the financial network it would -- Charter right. And you know but at the very least even have Time Warner Cable to wanna turn the tables what this can try and show you who's. What the value is for -- cable which right now the stock is trading around 130. Maybe it means you know based on this that charters gonna have to pay up to really wants to you know roads and -- -- Thanks to believe that. You can final -- -- breaking -- -- Coleman will be back with more breaking news tomorrow.
Press CTRL+C (Windows), CMD+C (Mac), or long-press the URL below on your mobile device to copy the code