Charter Communications confirms takeover of Time Warner Cable at $196 a share

Charter, which is 25% owned by telecoms tycoon John Malone’s Liberty Media group, will pay almost $196 a share for Time Warner in a cash and shares deal, with Charter selling $4.3bn worth of stock to Liberty Broadband, another part of Malone's empire.

Charter has also agreed to buy smaller competitor Bright House Networks for $10.4bn.

Time Warner, which owns 'Game of Thrones' maker HBO, is the second largest cable operator in the country and Charter is the fourth.

The combined company would become a significant rival to industry leader Comcast, which last month was forced to call off its own pursuit of Time Warner Cable by federal antitrust regulators more than a year's on-off bid battle between the pair.

JP Morgan said Charter's purchase "stands a better chance of securing regulatory approval", with the combination with Time Warner and Bright House together creating a company serving 23.9m customers in 41 states. This compares to Comcast's current figure of roughly 27m customers.

The merger deal includes a potential $2bn breakup fee should the deal fall through.

French cable firm Altice, which has built up a substantial warchest to fund to potential takeovers, has held talks with Time Warner could still move to mount a counterbid.

The deal values each Time Warner Cable share at approximately $195.71 based on Charter's market closing price on May 20.

A new public parent company called New Charter will be created, which will be 40%-44% owned by Time Warner Cable shareholders, with Bright House owners Advance/Newhouse owning 13%-14% and Liberty Broadband expected to have 19%-20%.