Charter Communications Inc. has struck a $55 billion cash-and-stock deal for Time Warner Cable Inc., giving cable mogul John Malone the prize he has been chasing for two years.
The offer is valued at about $195 a share, a 14% premium to Time Warner Cable's last closing price. Including debt, the deal is valued at $78.7 billion.
Shares of Charter gained 3.2% to $181 in premarket trading, while Time Warner's shares gained 11.3% to $190.50 a share.
The acquisition by Charter, which is backed by Mr. Malone's Liberty Broadband Corp., would vault the cable operator into the ranks of the biggest U.S. broadband and pay-television companies.
The deal comes only a month after Time Warner Cable went back on the block after Comcast terminated the companies' planned $45.2 billion merger in the face of serious pushback from Washington regulators. A Charter-TWC deal could be in for a stringent review in Washington as well, some analysts have said.
As part of the transaction, Charter will also merge with small operator Bright House Networks. The combined cable giant would have 23 million total customers, second only to Comcast's 27 million among cable operators.
Charter, which has 5.9 million residential subscribers in more than 25 states, and Mr. Malone are betting that increased scale will help the company navigate the industry's choppy waters. Operators must contend with the onset of cable "cord-cutting" as frustrated consumers drop connections, the rise of streaming-video competitors from Netflix Inc. to Apple Inc. and expected fights with TV-channel owners over which networks are worth keeping in a bundle.
