Charter Shares Surge 9% Amid Verizon Merger Report

Drexel Hamilton raised Verizon Communications from a hold rating to a buy rating and set a $54.00 price target on the stock in a research report on Monday, October 24th. The investors are seeking to add terms to the new debt they would swap into, such as a step-up coupon in case of a Charter deal, they said. Verizon had less than $3 billion of cash on its books as of the end of previous year, but would need far more than that to buy Charter, whose value in the stock market is around $103 billion now.

Verizon and AT&T are the two biggest wireless providers in the U.S.

The exploration of a Verizon-Charter Communications merger presents interesting questions for the telecommunications industry and how the new Trump administration will handle potential antitrust questions, according to a University of Kansas expert on mergers and acquisitions.

Charter Communications, Inc. (NASDAQ:CHTR) reports its Earnings on Thursday 16 Feb (In 21 Days). According to the WSJ, Verizon is considering a deal with Charter and has already started discussing the possibility.

It’s unclear whether Charter would be open to a merger. Verizon was looking into how a potential transaction would proceed, but there is no guarantee a deal would be forthcoming. If a deal was inked, it would combine Verizon’s more than 114 million wireless customers with Charter’s 17 million customers.

Acquiring Charter would – on one hand – allow Verizon to reach virtually everyone in NYC, but at the same time it would mean that there is no longer any competition for broadband in the market. The recent deal with Time Warner Cable was a great boon for the company, pushing its operations in big cities such as Los Angeles and NY. The president has vowed to kill AT&T’s similar $85.4 billion mega-merger with Time Warner during his campaign. “As we look at our current and pending assets in the media and IoT businesses, we will be focused on integrating these assets by increasing global scale organically and further enhancing cross-platform content sharing opportunities”. Orbis Allan Gray Ltd now owns 3,928,443 shares of the company’s stock worth $1,060,562,000 after buying an additional 219,007 shares in the last quarter.

At meeting with analysts in December, Mr. McAdam, the Verizon CEO, didn’t dismiss the idea of a Charter acquisition.

To that end, Verizon struck a deal to buy Yahoo Inc’s core internet properties. That transaction has been delayed by Yahoo’s disclosure past year of two massive security breaches. Charter past year closed the acquisitions of Time Warner Cable and Bright House to become the second-largest US cable operator. Some studies project that 23 million people will connect to the internet for the first time over the next three years, and by 2019, video streaming services like Netflix and Hulu are expected to account for 80 percent of the world’s traffic. Charter is the third-largest pay TV provider behind DirecTV and Comcast.