Charter Communications to Buy Bright House Networks in $10 Billion Deal

Charter Communications said that it had agreed to acquire Bright House Networks for $10.4 billion, in the latest consolidation of cable television operators to reshape the media landscape. The deal will further enlarge Charter, which is involved in the huge merger of Comcast and Time Warner Cable, the two biggest cable operators in the country. If that deal is approved, Charter will acquire some markets and subscribers from the enlarged Comcast.

But much hinges on the approval of Comcast’s acquisition of Time Warner Cable, including Charter’s acquisition of Bright House. If Charter is not able to acquire the disposed assets from Comcast, it will not go ahead with this deal. Bright House is the sixth-largest cable operator in the country, with about two million subscribers in Florida, Alabama, Indiana, Michigan and California. The structure of the deal will have Charter own 73.7 percent of a new company and Advance/Newhouse, the parent company of Bright House, own 26.3 percent. Charter will pay Advance/Newhouse a mix of $5.9 billion worth of common stock, $2.5 billion worth convertible preferred shares that pay a 6 percent coupon and $2 billion in cash. ”Bright House Networks provides Charter with important operating, financial and tax benefits, as well as strategic flexibility,” said Thomas M. Rutledge, Charter’s chief executive. “Bright House has built outstanding cable systems in attractive markets that are either complete, or contiguous with the New Charter footprint. This acquisition enhances our scale, and solidifies New Charter as the second largest cable operator in the US.” The Bright House deal is a signal that Charter executives believe the Comcast deal for Time Warner Cable will be approved. Antitrust experts have said that regulators in Washington are likely to scrutinize the deal for any detrimental effect it might have on consumers.