Why You Should Walk Away From The Charter Communications

29 May 2015 | Author: | No comments yet »

Altice Isn’t Leaving the U.S. Soon.

Whatever the outcome of the latest proposed mergers and acquisitions in the media industry, a clear winner has already emerged, and it’s not even a party to any of the deals: Netflix, the streaming television pioneer.Shares of Charter Communications (CHTR) are up $2.48, or 1.4%, at $177.81, after the company confirmed speculation it will acquire Time Warner Cable (TWC) for the equivalent of $195.71 per share, in a cash and stock deal that values TWC at over $78 billion.

To many in the cable and broadband businesses, the invisible hand of Netflix has been apparent in the failed Comcast-Time Warner Cable combination; in likely restrictions on the merger between AT&T and DirecTV; and in the Obama administration’s embrace of net neutrality, to cite just three prominent examples. Louis County leaders got to work immediately to discuss the corporate future in the region. “They advise us that they’re very optimistic on what this merger will bring to St. Indeed, the corporate philosophy of Netflix, which was once thought to be outgunned in Washington by the East Coast media conglomerates and their vast lobbying forces, now seems so pervasive that the Federal Communications Commission, or F.C.C., is being referred to by some media executives — half-jokingly and half-enviously — as the “N.C.C.” But Netflix is hardly the only corporate beneficiary. Louis County, and they believe that they will continue to strengthen their offices here and increase the number of employees as time goes on,” Stenger says. “We realize in my office, as well as the economic partnership, we are in constant competition with other jurisdictions.

Charter told analysts during a conference call a short while ago the deal is different from Comcast‘s (CMCSA) aborted bid for Time-Warner because it is smaller in scope. To varying degrees, an array of Silicon Valley powerhouses — including Google, Amazon, Facebook and Apple — gain from an open Internet and net neutrality, the notion that broadband service providers should treat all data equally, no matter its content, source or volume. The government worried that the company would be able to undermine increasingly popular online video competitors like Netflix because the bigger Comcast would have more than half the country’s high-speed Internet customers. FCC Chairman Tom Wheeler issued a statement saying “The Commission will look to see how American consumers would benefit if the deal were to be approved.” Matthew Harrigan of Wunderlich Securities, who has a Buy rating in both cable stocks, writing before the official announcement, commented that “We think that transaction will pass regulatory muster with the largest contingency being demonstrated accommodation to over-the-top video competitors, and the deal can be cast as pro-consumer with an even faster and more ambitious TWC network upgrade and prospects for a more aggressive new product array in areas such as Wi-Fi.” Shares of Apple (AAPL) are down 42 cents at $132.12, despite a bullish note from Cowen & Co.‘s Timothy Arcuri, who reiterated an Outperform rating on the stock, and raised his price target to $140 from $135, writing that his “field work” is “suggesting a far less pronounced ‘shoulder’ period for this iPhone cycle as 6/6+ units remain very strong,” suggesting Apple could sell 50 million iPhones this quarter and as many next, above Street expectations.

That these views have prevailed over long-entrenched telecommunication and cable interests is yet further evidence of the technology industry’s growing political clout inside the White House and on Capitol Hill. Instead, the French tycoon plans to build his U.S. footprint by acquiring control of smaller cable operators, according to two people with knowledge of the matter.

Smaller players in the U.S. such as Cox Communications, Cablevision Systems, and Mediacom Communications are expected to grow in value as heavyweights such as Comcast and soon-to-merge Charter continue to gobble up rivals that allow them to expand their reach and engineer cost efficiencies. The traditional cable ecosystem is breaking up — for example, you can subscribe to HBO online without having to pay for cable, or pay for a smaller group of channels that you watch via a Sony PlayStation. For 2016, he sees revenue of $3.4 billion and $1.37 in net income per share versus consensus of $4.1 billion and $3.48, and well below the company’s own forecast for $3.8 billion to $4.5 billion, and $3.50 to $5.

Drahi, the third-richest person in France, made his first move on May 20 when Altice, his Luxembourg-based holding company, agreed to acquire 70 percent of No. 7 U.S. cable operator Suddenlink Communications in a deal worth $9.1 billion. The main problem is that the company’s thin-film approach to solar cells is losing its edge against the main industry approach, polysilicon, he believes. Writes Sanganeria, “Driven by significant decline in polysilicon price and manufacturing efficiency improvement, we estimate that production cost of C-Si modules will be only 2 cents higher than First Solar by the end of 2015.” Twitter (TWTR) stock is up 11 cents at $36.71, following an article by Kara Swisher of Re/Code article saying the company is talking to custom news app maker Flipboard to buy the company for over $1 billion, which would be Twitter’s largest-ever acquisition. At the same time, he said, the influence of any one voice shouldn’t be exaggerated. “Their story just happened to fit perfectly into a broader narrative of the potential for harm to consumers,” Mr. We clearly expect to be right in the middle of that consolidation.” Altice will look at assets that the combined TWC-Charter may decide to divest to alleviate antitrust concerns, Drahi told a hearing at France’s National Assembly on May 27.

But “Netflix’s role is definitely an important piece of the puzzle.” From Netflix’s point of view, the fact that its views have gained traction with regulators is merely a recognition that its corporate philosophy, which it says has always been to put consumer interests first, coincides with sound public policy. A bidding war over TWC is unlikely, as the Charter offer is seen as too high for Altice to beat, according to the people. “Drahi is an aggressive cost-cutter, and his presence forced Malone to move quicker,” says Matthew Harrigan, an analyst at Wunderlich Securities. “They wanted to lock this down.” Altice had financing from banks lined up for a TWC buyout, according to the people. Ultimately, Drahi decided not to rush into an acquisition because Altice didn’t immediately have the scope to manage and absorb the company, Drahi told the National Assembly.

But Netflix, for better or worse, has become the symbol for net neutrality, which has become a key issue in how regulators analyze proposed cable and telecom mergers. Trying to beat Charter’s $195.71-a-share offer would require Altice to increase its leverage ratio significantly and engineer a large capital increase to fund the purchase, diluting Drahi’s stake in Altice, the people say. Of course, government antitrust and communications policy is supposed to benefit consumers, not any individual company or group of companies. “It’s fair to say Netflix has gotten something of a free pass,” said Scott Hemphill, visiting professor of antitrust and intellectual property at New York University School of Law. “This open Internet principle that’s in ascendance is certainly good for Netflix. The company already had more than €24 billion ($26.1 billion) in net debt before the Suddenlink deal, which it will finance by borrowing $6.7 billion.

It’s harder to say it’s good for consumers.” A pivotal moment in the net neutrality struggle came last year when Netflix agreed to pay Comcast so-called interconnection fees, a deal that Netflix’s Mr. ING Group analyst Emmanuel Carlier says Altice made the right decision, even though it may have had a better regulatory shot at buying TWC than Charter. Hastings’s ire, Netflix also reached similar interconnection deals with every other major Internet service provider.) But securing payment from Netflix for fast and more reliable access may have been a Pyrrhic victory for Comcast and the other the broadband providers. But when Netflix subscribers found their programs constantly interrupted for “buffering” (an interruption to download more data), the ability of Internet providers to play favorites seemed all too real.

Drahi declined to comment. “What Altice has done over the past few years is quite remarkable,” says Yvan Desmedt, a partner at law firm Jones Day who has advised large companies in telecom deals. “But it’s one thing to move into the U.S. market and a different one to succeed in such a competitive landscape.” But Comcast has offered a different narrative, asserting that Cogent Communications, an intermediary that lacked adequate data capacity, caused Netflix’s problems.

It probably didn’t hurt Netflix’s case that just about everyone in Washington watches the hit Netflix series “House of Cards,” and Comcast is the dominant Internet provider there. The fees Netflix so fiercely opposes are analogous to those found in many industries, such as credit cards, where both consumers and merchants pay the credit card companies. “It’s hard to say if these fees are good or bad for consumers,” Professor Hemphill said. But Netflix has aggressively pushed the argument that interconnection fees are different because the gatekeepers have too much power and an incentive to abuse it.

If regulators continue to sympathize with Netflix’s position, AT&T may have to make at least some of the concessions in its proposed $48 billion takeover of DirecTV. Even if Netflix doesn’t come out as forcefully against the merger as it did with the Comcast deal, its position will surely reverberate during the government’s review.

It’s true that a combined Charter-Time Warner Cable wouldn’t be nearly as large, giving it about 30 percent of the high-speed broadband market, nor does it own a content provider like NBCUniversal. Arguing the proposition that combining three of them into one is in consumers’ interest may be tough given that the Obama administration has publicly complained about the lack of broadband competition.

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UPDATE 1-Western Refining to buy rest of Northern Tier

20 Jan 2016 | Author: | No comments yet »

JPMorgan Chase & Co. Upgrades Northern Tier Energy LP (NTI) to “Neutral”.

Under the deal, Northern Tier unit holders would receive $15 a unit in cash and 0.2986 Western Refining share for each common unit held, or roughly $26.21 a unit based on Monday’s close. EL PASO, Texas and TEMPE, Ariz., Dec. 21, 2015 (GLOBE NEWSWIRE) — Western Refining, Inc. (NYSE:WNR) and Northern Tier Energy LP (NYSE:NTI) today jointly announced that they have entered into a merger agreement whereby Western will acquire all of NTI’s outstanding common units not already owned by Western. Northern Tier Chief Executive Dave Lamp in prepared remarks Monday said that the MLP model “has not been rewarded by the equity market, as evidenced by the historical disconnect between NTI’s high yield and low unit price.” “With a simplified corporate structure and diverse geographic base, the new Western will be well positioned to unlock additional value for shareholders,” Mr. As an alternative to the cash and stock consideration, each NTI unitholder may elect to receive, per NTI unit, either $26.06 in cash or 0.7036 of a share of WNR.

Assuming completion of the proposed transaction, NTI will become a wholly-owned subsidiary of WNR and NTI common units will cease to be publicly traded. Jeff Stevens, President and CEO of WNR said, “The merger of Western and NTI will result in the combined entity owning three of the most profitable independent refineries on a gross margin per barrel basis, with direct pipeline access to advantaged crude oil combined with an integrated retail and wholesale distribution network. The terms of the merger agreement were approved by the WNR Board of Directors and the Conflicts Committee of the Board of Directors of NTI’s general partner, which negotiated the terms on behalf of NTI. Four investment analysts have rated the stock with a hold rating, five have assigned a buy rating and one has issued a strong buy rating to the stock.

The call and slide presentation can be accessed on the Investor Relations section of Western’s website, www.wnr.com, and on the Investor Relations section of Northern Tier’s website at www.northerntier.com. The Company has refining, retail and logistics operations that serve the Petroleum Administration for Defense District II (PADD II) region of the United States. Goldman Sachs & Co. acted as financial advisor to Western, and Vinson & Elkins, Davis Polk & Wardwell and Richards Layton & Finger acted as legal counsel to Western. This press release includes “forward-looking statements” by Western (which are protected as forward-looking statements under the Private Securities Litigation Reform Act of 1995) and by NTI.

The Company’s retail segment operated 165 convenience stores under the SuperAmerica brand and also supported 89 franchised convenience stores, which are also operated under the SuperAmerica brand. These statements are subject to the risk that the merger is not consummated at all, including due to the inability of Western or NTI to obtain all approvals necessary or the failure of other closing conditions, as well as to the general risks inherent in Western’s and NTI’s businesses and the merged company’s ability to compete in a highly competitive industry.

If you are reading this article on another website, that means this article was illegally copied and re-published to this website in violation of U.S. and International copyright law. In addition, Western’s and Northern Tier’s business and operations involve numerous risks and uncertainties, many of which are beyond Western’s and NTI’s control, which could materially affect their respective financial condition, results of operations and cash flows and those of the merged company.

The forward-looking statements are only as of the date made, and neither Western nor NTI undertake any obligation to (and each expressly disclaims any obligation to) update any forward-looking statements to reflect events or circumstances after the date such statements were made, or to reflect the occurrence of unanticipated events. This communication does not constitute an offer to sell or the solicitation of an offer to buy any securities or a solicitation of any vote or approval in any jurisdiction where such an offer or solicitation is unlawful. Any such offer will be made only by means of a prospectus meeting the requirements of Section 10 of the Securities Act of 1933, pursuant to a registration statement filed with the SEC. The retail segment includes retail service stations, convenience stores, and unmanned fleet fueling locations in Arizona, Colorado, New Mexico, and Texas. Beyersdorfer (602) 286-1530 Michelle Clemente (602) 286-1533 Northern Tier Investor and Analyst Contact: Paul Anderson (651) 458-6494 Alpha IR Group (651) 769-6700 nti@alpha-ir.com Media Contact: Gary Hanson (602) 286-1777

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