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SEC Filings

PREM14A
CHARTER COMMUNICATIONS, INC. /MO/ filed this Form PREM14A on 06/26/2015
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In mid-October 2013, Brian L. Roberts, Chairman and Chief Executive Officer of Comcast Corporation (“Comcast”), indicated to Robert D. Marcus, then President and Chief Operating Officer of TWC and currently Chairman and Chief Executive Officer of TWC, Comcast’s interest in exploring a merger of Comcast and TWC. Over the next several months, Comcast and TWC, together with their respective advisors, engaged in substantive discussions regarding a potential transaction and negotiated the terms of a merger agreement. On February 12, 2014, TWC and Comcast entered into an Agreement and Plan of Merger, by and among TWC, Comcast and Tango Acquisition Sub, Inc. (the “Comcast-TWC merger agreement”), pursuant to which Comcast agreed, on the terms and subject to the conditions therein, to acquire all of TWC’s outstanding common stock in exchange for Comcast common stock (the “Comcast-TWC merger”), with an implied nominal value of $158.82 per share of TWC common stock, as of February 12, 2014. The obligations of Comcast and TWC to complete the Comcast-TWC merger were conditioned upon the receipt of applicable regulatory approvals from the DOJ, the FCC and local franchising authorities, among other things.

Comcast-Charter Transaction

Also following execution of the Comcast-TWC merger agreement, on April 25, 2014, Comcast and Charter entered into a binding term sheet providing for a series of transactions (the “Divestiture Transactions”), including Charter’s acquisition of interests in a new spun-off entity holding certain cable systems of Comcast, Charter’s acquisition of certain cable systems of TWC, and Comcast’s acquisition of certain cable systems of Charter. The closing of the Divestiture Transactions was conditioned upon the closing of the Comcast-TWC merger.

Bright House Transaction

Bright House is a wholly owned subsidiary of Time Warner Entertainment-Advance/Newhouse (TWE-A/N). TWE-AN is a partnership formed in 1995 between A/N and Time Warner Cable Enterprises LLC (as a successor to Time Warner Entertainment Company, L.P.), a subsidiary of TWC (“TWCE”). The Bright House systems are managed on a day to day basis by A/N, which is entitled to 100% of the economic benefits of Bright House. TWC and its affiliates provide Bright House with certain programming, engineering and technology services through a services agreement between the parties. TWCE and A/N are parties to the Third Amended and Restated Partnership Agreement of Time Warner Entertainment-Advance/Newhouse Partnership, dated as of December 31, 2002 (the “Partnership Agreement”). Pursuant to the Partnership Agreement, TWCE has a right of first offer over dispositions of Bright House by A/N (the “ROFO”).

In early 2014, it was reported in the press that A/N had engaged UBS Securities LLC (“UBS”) as a financial advisor in light of the ongoing speculation surrounding TWC and the possibility that TWC might be acquired by another cable operator. Shortly thereafter, Charter and Bright House began to discuss the possibility of a strategic transaction.

On April 4, 2014, Bright House sent to Charter a list of “guiding principles” that it believed should govern a potential combination between Bright House and Charter, including that the combination should provide a source of regular cash flow to A/N as well as appropriate governance and other rights for A/N in the combined company. On April 18, 2014, Charter and Bright House entered into a non-disclosure agreement contemplating the exchange of confidential information between the parties for the purposes of evaluating a potential combination. In May 2014, the board of directors of Charter received an update on these discussions from Charter management.

On June 11, 2014, A/N sent a high-level term sheet for a potential combination between Charter and Bright House to Charter. The term sheet set forth a proposal for A/N to contribute Bright House to a partnership that would hold the combined company’s operations (“Charter Holdings”) in return for consideration comprising $1 billion in cash, convertible preferred units of Charter Holdings that would deliver cash flow to A/N in the form of preferred dividends, common units of Charter Holdings that would be exchangeable into Charter common stock, and Class B common stock of Charter that would have no economic rights but would entitle A/N to a number of

 

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