SoftBank back on the Charter hunt? Reportedly buys 5% of cable operator's stock

Sprint Store sign
Image: Sprint

Japan’s SoftBank has laid the groundwork for a $100 billion takeover of Charter Communications by its U.S. mobile operator Sprint Communications, the London Times reported over the weekend. 

The Times said that led by billionaire Masayoshi Son, SoftBank has quietly purchased 5% of Charter stock in recent weeks. 

Neither Charter or Sprint has commented on this report. 

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Last summer, Charter rebuffed a SoftBank merger offer of $540 a share at a time when the cable operator’s stock was trading in the low $400 range. Liberty Media kingpin John Malone, Charter’s biggest shareholder, was reported to be in favor of the deal. Also enthusiastic was the Newhouse family, who became influential Charter shareholders when the cable company bought Bright House Networks.

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Charter’s management team, led by Chairman and CEO Tom Rutledge, has been resistant of a takeover, while still keen on actualizing the value of fully digested integrations of 2016 acquisitions Bright House and Time Warner Cable. 

For his part, New Street Research analyst sees a Charter as a highly accretive potential pickup for No. 3 U.S. wireless operator Sprint. 

“Assuming the reports are true, whether this turns into a bid for the whole company, or it is just a passive investment in a great and undervalued asset, we are just delighted that someone else sees the value in Charter we see,” Chaplin wrote in a note to investors this morning. 

“We think Sprint is uninvestable on its own (short on fundamentals; long if Masa buys out minorities at $12),” Chaplin added. “A Charter deal could be transformative to the company’s prospects, but we would expect most of the value to go to Charter shareholders. We continue to recommend Charter and would remain on the sidelines on Sprint.”