Shares of Time Warner Cable Inc. rose about 10 percent in afternoon trading Friday on news reports that two cable television operators are weighing whether to make bids for the cable service provider.
THE SPARK: On Friday, the cable TV channel CNBC reported that Comcast Corp. is seeking advice about the possible regulatory hurdles it could face if it were to make a bid for Time Warner Cable. CNBC did not identify its sources.
That report came after The Wall Street Journal reported that cable operator Charter Communications Inc. was looking to line up financing for a bid for Time Warner Cable. The Journal also cited sources it did not identify.
Comcast is the nation's largest cable network operator and the CNBC report said Time Warner Cable would prefer a deal with Comcast to head off a bid from Charter.
Spokesmen from Charter and Time Warner Cable declined to comment. A representative from Comcast did not respond to a request for comment.
THE ANALYSIS: Rumors that cable companies are thinking of combining have been circulating for months.
"We believe cable consolidation remains a threat to cable investors over the next six months whether a deal is announced or not," said Citi analyst David Phipps, in a note to clients.
Time Warner Cable's third-quarter earnings report showed a drop in TV subscribers. It was hurt by a rate dispute with CBS Corp. that put the network off the air in more than 3 million homes for about a month. Its net income fell 34 percent in that quarter from a year ago.
SHARE ACTION: Shares of Time Warner Cable rose $12.22, or 10 percent, to $133.08 in afternoon trading Friday. Comcast rose $2.42 ,or 5.1 percent, to $49.87. Charter rose $7.27, or 5.7 percent, to $134.22.
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Original headline: Time Warner Cable shares up on takeover talk
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