Charter to buy Bright House Networks

March 31, 2015
Charter Communications, Inc. (NASDAQ: CHTR) and its subsidiary, CCH I, LLC (which currently bill themselves as the "New Charter") and Bright House Networks have decided to soothe the headaches the proposed Comcast/Time Warner Cable deal would cause them by pooling resources in the form of M&A. Charter has reached agreement with Bright House's owner, Advance/Newhouse Partnership, to buy Bright House for $10.4 billion.

Charter Communications, Inc. (NASDAQ: CHTR) and its subsidiary, CCH I, LLC (which currently bill themselves as the "New Charter") and Bright House Networks have decided to soothe the headaches the proposed Comcast/Time Warner Cable deal would cause them by pooling resources in the form of M&A. Charter has reached agreement with Bright House's owner, Advance/Newhouse Partnership, to buy Bright House for $10.4 billion.

Charter, and particularly leading shareholder Liberty Broadband (NASDAQ: LBRDA, LBRDK), have been active in promoting consolidation within the cable MSO community as a way of addressing the shifting video subscriber market, including the advent of over-the-top (OTT) programming and other alternatives to standard cable video services. Charter placed a bid for Time Warner Cable (TWC) but was trumped by Comcast. Bright House, meanwhile, has an operating agreement covering technology and programming rates with TWC that the proposed Comcast/TWC merger imperils.

So a linkup makes sense for both parties. However, a complicating factor is that TWC holds a "right of first offer" for Bright House. Thus, the acquisition will hinge on whether the Comcast/TWC merger goes through. The fall out from that deal also would see Charter acquire certain assets from the Comcast/TWC tie up (see "Time Warner Cable agrees to merge with Comcast" and "Comcast agrees with Charter on post Time Warner Cable merger divestitures").

The proposed deal would see the creation of a partnership between Charter and Advance/Newhouse using an existing subsidiary of Charter Communications Holding Company, LLC, a partnership subsidiary of Charter. New Charter would contribute 100% of its assets into the partnership, and Advance/Newhouse would contribute 100% of Bright House's assets. Charter would own 73.7% of the new entity. Advance/Newhouse would receive common and convertible preferred units in the partnership, as well as $2 billion in cash.

At the transaction's close, New Charter's board of directors will comprise 13 directors, including three designated by Advance/Newhouse and three designated by Liberty Broadband.

Charter's shareholders must approve the deal, as must federal regulators. Given the seemingly endless review process of the Comcast/TWC merger, this latter approval is neither guaranteed nor should it be expected quickly.

If the deal closes, the combination would create the second largest cable MSO in the United States, behind Comcast/TWC. Bright House currently is the sixth largest cable operator in the country, with approximately 2 million video subscribers in central Florida (including Orlando and Tampa Bay), Alabama, Indiana, Michigan, and California. The company has been an early proponent of DOCSIS Provisioning over EPON (see "Alcatel-Lucent unveils DPoE platform, signs Bright House Networks").

For more information on FTTx equipment and services, visit the Lightwave Buyer's Guide.


About the Author

Stephen Hardy | Editorial Director and Associate Publisher

Stephen Hardy has covered fiber optics for more than 15 years, and communications and technology for more than 30 years. He is responsible for establishing and executing Lightwave's editorial strategy across its digital magazine, website, newsletters, research and other information products. He has won multiple awards for his writing.

Contact Stephen to discuss:

  • Contributing editorial material to the Web site or digital magazine
  • The direction of a digital magazine issue, staff-written article, or event
  • Lightwave editorial attendance at industry events
  • Arranging a visit to Lightwave's offices
  • Coverage of announcements
  • General questions of an editorial nature

Sponsored Recommendations

Transforming the metro network and the evolution of the "Digital Service Provider"

March 4, 2025
Join experts at EXFO and Ekinops in this webinar that will review the evolving metro-centric requirements and the technologies emerging to meet them.

Unveiling the Synergy Between AI and Optical Networking

March 12, 2025
Join us for an engaging discussion with industry experts on the intersection of AI and optics. Moderated by Sean Buckley, editor-in-chief of Lightwave+BTR, this panel will explore...

On Topic: Tech Forecast for 2025/ What Will Be Hot

Dec. 9, 2024
As we wind down 2024, Lightwave’s latest on-topic eBook will examine the hot topics for 2025. AI is at the top of the minds of optical industry players supporting...

ON TOPIC: Filling Coverage Gaps, Enhancing Public Safety

Jan. 30, 2025
With the ongoing drive to support AI and the need for high-speed data center interconnection, the call for higher-speed 800G optical technology is emerging. Initially focused ...