NEW YORK (AP) — Time Warner Cable Inc. laid out a three-year plan for boosting revenue Thursday as it sought to offer investors an alternative to a takeover bid from smaller rival Charter Communications Inc.
Earlier this month, Charter said it would bring a cash-and-stock offer directly to Time Warner Cable shareholders, after getting rebuffed by the company's management, of about $38 billion, or about $132.50 per share. The combined entity would benefit from cost savings and what Charter has said is a superior management team.
Time Warner Cable CEO Rob Marcus, on his first quarterly earnings call since taking the top job Jan. 1, repeated that the bid "substantially undervalues our company." He maintained that Time Warner Cable would accept an offer of $160 per share, with $100 in cash and $60 in Charter stock.
"What I think hopefully became abundantly clear is that we feel very good about our ability to run this business, and we can create a whole lot of value for shareholders," Marcus told investors Thursday.
Cable industry pioneer John Malone's $2.6 billion investment in Charter in March set off the latest spurt of consolidation activity. Cable companies are seeking bigger size to face down the rising cost of content, while solidifying their foothold as a major Internet provider in many markets.
And the company's video customers are shrinking. While Time Warner Cable said its relationship with its customers was improving, it lost another 217,000 home video subscribers in the October-December quarter, ending the year with 11.2 million. Excluding the September quarter, when a month-long blackout of CBS due to a fee dispute resulted in a subscriber exodus, it was the worst performance in more than five years. On an annual basis, the company lost 833,000 video customers, a figure that has grown worse for the last three years.
But it added 39,000 home Internet customers, ending the year with 11.1 million.
Chief Financial Officer Artie Minson said the company added 25,000 customer relationships in January, compared to a loss of 28,000 in January 2013. While he didn't specify which services were added — Internet, video or voice — he said it was the "best January from a residential subscriber perspective in the last five years."
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