Acquisition of Time Warner Cable Inc. by Comcast Corporation May Not Be in Shareholders’ Best Interests
Robbins Arroyo LLP is investigating the proposed acquisition of Time Warner Cable Inc. (NYSE: TWC) by Comcast Corporation (NASDAQ: CMCSA). On February 13, 2014, the two companies announced the signing of a definitive agreement pursuant to which Time Warner Cable shareholders will receive 2.875 shares of Comcast stock in exchange for each share of Time Warner Cable stock, for an implied price per share of $158.82 based on Comcast’s closing stock price on February 12, 2014.
Is the Proposed Merger Best for Time Warner Cable and Its Shareholders?
Robbins Arroyo LLP’s investigation focuses on whether the board of directors at Time Warner Cable is undertaking a fair process to obtain maximum value and adequately compensate Time Warner Cable shareholders.
As an initial matter, the $158.82 merger consideration is well below the target price of $165.00 set by an analyst at Northland Securities, Inc. on December 3, 2013, and the $160.00 target price set by an analyst at BTIG, Inc. on December 17, 2013.
In addition, on January 30, 2014, Time Warner released its financial results for the fourth quarter ended December 31, 2013, reporting quarterly gains in revenue, business services revenue, and residential high-speed data revenue. Specifically, Time Warner Cable reported a 21.6% increase in business services revenue and a 14.4% increase in residential high-speed data revenue compared to the same quarter 2012. The company also reported an increase in its full-year 2013 Adjusted Diluted EPS of 15% to $6.61, compared to $5.75 for 2012. For the quarter, Time Warner Cable beat Bloomberg EPS estimates by over 5% and has beaten Bloomberg EPS estimates in eight of the last ten quarters.
In commenting on the company’s results, Time Warner Cable President and CEO, Rob Marcus, remarked, “I’m really excited about the progress we made in Q4 and the significantly better trends we’re driving as we enter 2014. We are geared up to manage this company for the long haul. We’ve got the right assets and a talented, passionate and motivated team aligned around a thoughtful plan. We are executing well and we’ve started the year with meaningful operating momentum.”
Given these facts, Robbins Arroyo LLP is examining the Time Warner Cable board of directors’ decision to sell the company to Comcast now rather than allow shareholders to continue to participate in the company’s continued success and future growth prospects.
Time Warner Cable shareholders have the option to file a class action lawsuit to ensure the board of directors obtains the best possible price for shareholders and the disclosure of material information.
Time Warner Cable shareholders interested in information about their rights and potential remedies can contact attorney Darnell R. Donahue at (800) 350-6003, or you can complete the form below and we will contact you directly.
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