Charter challenges Comcast-Time Warner deal

Charter Communications Inc. has urged Time Warner Cable Inc. investors not to endorse a takeover by Comcast Corp., signaling it is not backing down in its pursuit of Time Warner Cable.

Comcast, which outbid Charter this year with a $45 billion stock offer, is too susceptible to regulatory hurdles because it is the biggest company in the cable industry, Charter said Friday in a filing. Time Warner Cable refused to engage with Charter to develop a merger deal, Charter said.

Charter, the fourth-largest U.S. cable company, had offered to buy Time Warner Cable - the No. 2 - for $3 billion in cash and stock, a bid rejected as too low by Time Warner Cable CEO Rob Marcus. Although Comcast's shares have declined about 10 percent since the acquisition agreement was announced, they would need to drop at least a further 8 percent to reach the levels of Charter's proposal.

"We are fully committed to our merger with Comcast, which we believe is in the best interests of shareholders," Time Warner Cable said Friday. Comcast representatives did not immediately return calls for comment.

Like Comcast, Charter pursued a takeover of the second-largest U.S. cable carrier to reduce costs and gain greater leverage in negotiations with networks and programming providers such as CBS Corp. and Viacom Inc.

Charter is considering buying some of the three million subscribers Comcast plans to sell following the acquisition, according to a person familiar with the matter. Charter CEO Tom Rutledge said last month he was "still interested in wisely acquiring subscribers," declining to comment specifically on the Comcast deal.

Comcast vowed to help more low-income families connect to the Internet this month as David L. Cohen, the company's executive vice president, began meeting with U.S. regulators who will review the agreement. Federal Communications Commission Chairman Tom Wheeler, a Democrat, may also seek to protect online video providers such as Netflix Inc. from excessive charges for streaming content and use the deal to extend fast Web access to more residences and schools. Comcast needs approval from the FCC and antitrust officials at the Justice Department.

Billionaire John Malone bought a 27 percent stake in Charter last year through his holding company Liberty Media Corp. as he sought to consolidate the cable industry.