Posted: 6:53 p.m. Friday, Aug. 2, 2013
By J. Scott Trubey
The Atlanta Journal-Constitution
A report of possible merger discussions between two of the nation’s biggest cable companies stirred Wall Street on Friday.
Atlanta-based Cox Communications, the nation’s No. 3 cable provider by subscribers, has had discussions about a combination with No. 4 Charter Communications, according to a report by Bloomberg News.
But in an internal memo to employees, Cox Communications President Pat Esser dismissed the news report and said he had not met with representatives of Charter or major shareholder Liberty Media to discuss a merger.
“While our standard policy is to not comment in the press on rumors related to mergers and acquisitions, the media continues to persist with these rumors and I felt it important to let you know that they are just that — rumors and speculation,” Esser wrote.
The Bloomberg report, citing unnamed sources, said Cox Communications officials have discussed the issue with Liberty Media, which owns 27 percent of Charter.
Cox Communications is a division of Atlanta-based Cox Enterprises, a privately held company whose media holdings include The Atlanta Journal-Constitution.
Spokespeople for Cox Enterprises, Cox Communications and Charter declined to comment to the AJC about the merger report.
Cox Communications provides some service in Georgia, but mainly operates in New England, other parts of the Southeast, the Midwest and the Southwest. Charter operates in 25 states, including Georgia.
Colorado-based Liberty Media is also the parent company of the Atlanta Braves. John Malone, who controls the media conglomerate, has said that he sees Charter as a potential vehicle to acquire other cable assets.
Charter and Liberty Media have been discussing a merger with Time Warner Cable, according to the Bloomberg report. The possibility of a deal between Charter and Cox sent Charter shares surging and caused a midday tumble in Time Warner Cable shares.
Charter shares ended the day up $6.04 or nearly 5 percent at $134. Shares of Time Warner Cable finished the day off 58 cents at $117.10. Trading volume was much higher than normal for both companies.
Cox Communications and Charter are about equal in size in terms of subscribers — 4.8 million and 4.4 million video subscribers, respectively.