T. Rowe Price, one of the biggest investors in the country, wants Time Warner Cable and Charter Communications to sit down at the bargaining table.
According to people briefed on the matter, T. Rowe sent Time Warner Cable a letter urging it to engage in discussions with Charter Communications, which has made a proposal to acquire the cable operator.
T. Rowe is one of only a couple shareholders that have stakes in both Time Warner Cable and Charter. Between its various portfolios, T. Rowe owns about 5.2 percent of Charter and about 2.3 percent of Time Warner Cable. Vanguard, another major investor, also has positions in both companies.
Earlier this month, Charter made a proposal to acquire Time Warner Cable for $132.50 a share, valuing the country’s second largest cable operator at about $37.8 billion. Time Warner Cable called that “grossly inadequate†and said it would consider a bid of $160 per share.
Though the letter from T.-Rowe did not name a specific price at which it would like to see a deal get done, the money manager’s holdings suggest it may have more of an incentive to see Charter get a good deal than to see it over pay.
T. Rowe price has various portfolios overseen by different managers, who can sometimes disagree on what the same company should do. But people briefed on the letter said it was signed by the T. Rowe analyst that is in regular dialogue with the company, as well as three portfolio managers, suggesting that in this case at least, T. Rowe is speaking with one voice.
This is not the first time T. Rowe has gotten involved in a deal. Last year it opposed the buyout of Dell, and has previously protested the buyout of Cablevision. But in this case, it is urging two companies it owns to proceed with discussions, rather than trying to block a deal.
Yet if all T. Rowe is doing is asking the two companies to talk, it may have already gotten its wish. Time Warner Cable and Charter executives have met repeatedly in recent months, but have so far failed to reach an agreement over price.
Time Warner Cable is set to announce earnings next Thursday, and plans on holding an extended conference call during which it will address Charter’s overtures. It remains to be seen if Charter will make another move before that call.
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