Peter Lauria of BuzzFeed writes about how Time Warner Cable used the financial press last week to open the negotiations to sell the company.
Lauria writes, “While the WSJ story provided the floor, the Bloomberg story offers up the ceiling. The article is essentially an open invitation to negotiations disguised as an interview with Time Warner Cable’s incoming CEO Rob Marcus, who is due to replace longtime Chief Executive Glenn Britt at the start of the new year. It describes Marcus’ lengthy experience as a finance and mergers specialist and quotes him talking about his interest in creating value for shareholders even if it means he’d be out of a job. (Don’t feel too bad for Marcus, his contract calls for him to get a $50 million payout if the company is sold.)
“But here’s the key line in the story, and it comes not from Marcus, despite his being quoted at length in the piece — but from someone speaking off the record, with an attribution that does not identify, or rule out, Marcus as the speaker: ‘Time Warner Cable, the second-largest U.S. cable provider, would probably accept a bid of $150 to $160 a share, according to a person familiar with the matter, who asked not to be named because the deliberations are private.’
“Later on Friday, Reuters followed Bloomberg with its own exclusive story about how Comcast has hired JPMorgan to advise it on a potential bid. Sixteen paragraphs down in that piece, there’s this auspice line: ‘Any suitor would likely need to bid at least $150 per share to be considered seriously by Time Warner Cable’s board, one person familiar with the matter said.’
“The astute reader will note that both stories attributed to $150 price tag to a single source. Even if it isn’t the same source speaking to both outlets (though it probably is), the figure is more likely deliberate than coincidental. Put bluntly, the signal being sent to potential buyers is that if they offer $150 or more per share, Time Warner Cable is theirs.”
Read more here.
