Sources: Comcast to withdraw offer for Time Warner
Comcast Corp. is planning to walk away from its proposed $45.2 billion takeover of Time Warner Cable Inc., people with knowledge of the matter said, after meeting with opposition from U.S. regulators.
Comcast's board was to meet to finalize the decision Thursday, and an announcement may come as soon as Friday, said one of the people, who asked not to be identified because the information is private.
The cable giant had been facing growing resistance in Washington to the deal, which would have seen it spin off a new cable provider to serve most of its Michigan customers in order to clear regulatory hurdles.
This week, U.S. Federal Communications Commission staff joined lawyers at the Justice Department opposing the transaction. FCC officials told representatives of the two biggest U.S. cable companies on Wednesday that they are leaning toward concluding the merger doesn't help consumers, said a person with knowledge of the matter.
The FCC's move effectively killed chances of success for a deal that has been awaiting regulatory approval for more than a year. An FCC hearing can take months to complete and drag out the approval process beyond the companies' time frame for completion. Bloomberg News reported last week that Justice Department staff was also leaning against the deal.
Comcast shares rose 0.8 percent to $59.23 at the close in New York, while Time Warner Cable slid 0.6 percent to $148.76.
Sena Fitzmaurice, a spokeswoman for Comcast, declined to comment, as did Bobby Amirshahi, a spokesman for Time Warner Cable.
As recently as Wednesday, Comcast lobbyists were making a last-ditch effort to save the deal, which would have created a cable and Internet juggernaut serving 57 percent of U.S. homes that receive broadband at speeds that meet the FCC standard set in January. After meeting with FCC officials, Comcast and Time Warner Cable were left with little hope, said one of the people.
The loss of its suitor leaves Time Warner Cable's future in limbo. Executives at the company are planning to tell shareholders on an earnings conference call next Thursday how the company is prepared to survive as a standalone company, according to one of the people.
Before the deal with Comcast was announced in February 2014, Time Warner Cable was in talks to merge with a smaller cable provider Charter Communications Inc., whose largest investor is billionaire John Malone. Those talks could be revived by Comcast's exit.
In the short term, the deal's collapse means Charter, which agreed to take control of 3.9 million Comcast cable-TV subscribers to help ease its approval, won't get those customers. Another Charter deal, the recent agreement to purchase of Bright House Networks, could also be in jeopardy.