LOS ANGELES (AP) — Charter Communications executives labeled Time Warner Cable a "turnaround project" suffering from a failed strategy as they urged Time Warner Cable shareholders to prod management to begin talks with Charter on its buyout offer.
The criticism was leveled Tuesday after Charter revealed details of its proposed bid for Time Warner Cable for around $132.50 a share, or $38 billion. The offer would create the third-largest pay TV provider in the country with 16 million video customers.
Executives with Charter Communications Inc., which has 4.2 million video customers, argued that a deal is urgently needed because Time Warner Cable Inc. is rapidly losing customers for key services such as video, voice and even Internet.
"This negative momentum isn't simply the result of their operating plan over the last year. It is the failed plan over the past half-decade," said Charter's chief operating officer, John Bickham, in a conference call with analysts.
Time Warner Cable shot back, saying there was nothing in Charter's presentation Tuesday that "changes the fact that its proposal is grossly inadequate." Time Warner executives have said their company is worth $160 a share, while Charter says its rival's hope for a better deal is "unrealistic."
Charter says the offer it is contemplating — for $82.54 in cash and roughly $49.96 in Charter stock for every Time Warner Cable share — is 38 percent higher than where its target's stock was trading when it first made a bid in June.
Charter's online presentation had more details on its proposal, including that it expects $750 million in annual operating cost savings. It also said if it projected its own revenue growth rate for the last 18 months onto Time Warner Cable's results in 2015 and 2016, Time Warner Cable's 2016 revenue would be $725 million higher than current forecasts.
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