French-Israel billionaire Patrick Drahi’s quest to become a major player in the US cable market has pitted him against his mentor John Malone, a US media mogul. Drahi, who last week acquired St. Louis-based cable company Suddenlink in a deal worth $9.1 billion, is apparently making financial arrangements to acquire Time Warner Cable, the second-largest US cable company.
Patrick Drahi, chairman of France’s Altice, has often cited 74 year-old American cable magnate Malone as his mentor and role model.
Malone’s Charter Communications is currently in talks with Time Warner Cable for a potential merger deal. Financial Times cited an unnamed source saying Charter was willing to pay a “large premium to secure Time Warner Cable.” Malone’s bid to acquire Time Warner Cable was almost uncontested before Drahi made his entry into the market by buying Suddenlink, in a surprise move last week.
Drahi’s Luxembourg-based Altice, valued at $36 billion, could face an uphill battle acquiring the much larger Time Warner Cable, a $45 billion plus company. Altice is reportedly in talks with leading financing institutions including JPMorgan Chase, Barclays and Société Generale to back up a possible cash bid.
Moroccan-born financial whiz, Drahi, created his European telecom empire by acquiring more than 20 mobile and cable companies across the continent – often at knock-down rates. He has helped to consolidate European cable market, which is still considered fragmented, compared to US market.
Comcast’s $45 billion bid to buy rival Time Warner Cable failed last month after US regulators raised objections to the mega-merger.
Both Malone and Drahi are considered as strong contenders for the company. According to media reports, the battle for Time Warner Cable could go either way and the deal could formalised as soon as this week.
As speculations of a potential mega-deal heated up, Time Warner Cable’s stocks spiked above 3 percent to $171.18 before the markets closed on Friday, pushing company’s market valuation to more than $48 billion.