Comcast plans to drop Time Warner Cable bid

Written by on April 24, 2015 in News with 0 Comments
Pedestrians walk past the Time Warner Cable headquarters in New York REUTERS/Joshua Lott

Pedestrians walk past the Time Warner Cable headquarters in New York REUTERS/Joshua Lott

(Reuters) – Comcast Corp plans to drop its $45 billion (29.88 billion pound) offer to buy Time Warner Cable Inc  in the face of opposition from U.S. regulators, Bloomberg reported on Thursday, citing people with knowledge of the matter.

The cable operator could announce its decision on the merger as soon as Friday, Bloomberg said. The proposed deal would combine the nation’s two largest cable companies.

The news came a day after Comcast and Time Warner Cable officials met with reviewers from the Federal Communications Commission and the Justice Department. Sources told Reuters that the FCC reviewers told staff at the agency in a briefing on Wednesday that they planned to recommend taking the merger issue to an administrative law judge for a hearing.

This action would amount to the FCC trying to block the deal.

Comcast and Time Warner Cable representatives declined to comment on any plans to drop the deal.

Last week, Bloomberg reported that attorneys at the Justice Department’s antitrust division were nearing a recommendation to sue to block the merger, citing concerns for consumers.

“If reports of the collapse of the deal are true, it would be a huge victory for American consumers,” said U.S. Senator Al Franken, a Democrat from Minnesota and a vocal opponent of the merger.

“This transaction would create a telecom behemoth that would lead to higher prices, fewer choices, and even worse service. We need more competition in this space, not less,” Franken said in a statement.

Charter Communications Inc had lost out to Comcast in a bid to acquire Time Warner Cable.

A Charter spokesman had no comment on the Comcast-Time Warner Cable deal or what Charter plans to do next. However, Charter’s controlling shareholder, Liberty Media Corp has indicated continuing interest. At an investor day last November, when asked if he would pursue Time Warner Cable if the Comcast bid fell through, Liberty Media Chairman John Malone said “Hell yes.”

Greg Maffei, chief executive of Liberty Media, had no comment on Thursday.

Shares of Comcast closed up 0.8 percent at $59.25 and Time Warner Cable closed down 0.6 percent at $148.76 in afternoon trading following the report. Charter shares closed down 0.7 percent at $183.58.

(Reporting by Peter Henderson and Alina Selyukh, Writing by Meredith Mazzilli; Editing by Ted Botha and David Gregorio)

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