Liberty Media Close to Buying Stake in Charter: Report
Liberty Media is close to buying a 25 percent stake in cable operator Charter Communications for about $2.5 billion, The Wall Street Journal reported on Monday, citing unnamed sources familiar with the situation.
Charter Communications shares rose 7.4 percent to $96.74.
A Liberty spokeswoman declined to comment on the report while a spokeswoman for Charter, the eighth largest U.S. cable operator, was not immediately available for comment.
Liberty Media, a holding company controlled by cable pioneer John Malone, has been tweaking its portfolio in recent months. It spun off the premium TV cable network Starz in January, increased its stake to gain full control of satellite radio Sirius XM Radio and is also buying more shares in concert promoter and ticketing company Live Nation Entertainment.
"Malone typically likes subscription businesses that have a fair amount of leverage and I think he's fairly bullish on U.S. cable," said Wunderlich Securities analyst Matthew Harrigan.
Malone, who has been nicknamed "the king of cable," founded Tele-Communications, or TCI, which he grew into the largest cable operator in the U.S. before selling it to AT&T. Malone is also the chairman of Liberty Global, the international cable operator that purchased Virgin Media, a U.K. company, for about $15.75 billion in February.
Charter's CEO Tom Rutledge was the chief operating officer of Cablevision Systems before he left in 2011. Charter recently purchased a Western cable unit of Cablevision for $1.625 billion in February.
Liberty Media shares fell $1.35 or 1.2 percent to $109.08 on Monday.