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Charter not cheap -Time Warner Cable CFO

By Reuters

NEW YORK (Reuters) - Charter Communications Inc, the fourth-largest U.S. cable company, is not a cheap acquisition target, the chief financial officer of Time Warner Cable Inc told Reuters on Monday.

"Charter is an example of a situation when you really have to look at more than the stock price," CFO Rob Marcus told the Reuters Media Summit in New York, when asked about rumors that Time Warner Cable may buy Charter.

"Even today at the level they're trading - at pennies essentially - (Charter) is still trading at an enterprise value that is probably double the enterprise value of Comcast or Time Warner Cable," Marcus told Reuters. "So that tells me it's not cheap at all."

Analysts have named Time Warner Cable, the second-largest U.S. cable company, which is in the process of separating from Time Warner Inc, as the most likely buyer for Charter.

Buying Charter would help Time Warner Cable compete better against Comcast Corp, the largest U.S. cable company.

Shares of Charter, in which Microsoft Corp co-founder Paul Allen owns a controlling stake, were trading at 18 cents, down more than 1.2 percent, in morning dealings on the Nasdaq.

Marcus told Reuters any potential acquirer of Charter would also have to take on the U.S. cable company's large debt load.

"One of the issues, the thing that's really precluded in any transaction in spite of the fact that they've been rumored to be looking for a buyer for several years, is that they've got debt leverage levels that actually exceed what the top-tier cable companies are trading at on an enterprise value basis," Marcus said.

Reuters