Charter CFO says company in 'unique position' for a M&A deal

Reuters

By Liana B. Baker

Nov 5 (Reuters) - Charter Communications Inc finance chiefChris Winfrey said on Tuesday he and Chief Executive TomRutledge have talked about potential mergers and acquisitionsthat would take advantage of the "unique position" the cableoperator has because of its tax assets.

Reuters reported last Friday that Charter wasweighing a bid for Time Warner Cable Inc before the yearend and is trying to devise a deal that would be attractive tothe shareholders of the No. 2 U.S. cable operator.

Winfrey told investors on a conference call following thecompany's third quarter results that its tax assets, "putCharter in a pretty unique position to look at acquisitions,swaps ... and it can be a value accretive element of an M&Astrategy."

The remarks were made in response to a question about howCharter's tax assets would work if Charter merged with a largercable operator.

Charter, which emerged from bankruptcy protection in 2009,has roughly $7.7 billion in net operating losses as of Dec. 12,including $3.7 billion in net operating losses withoutrestrictions, according to a Barclays research note dated July30.

Winfrey added that taxes were not the only reason to do M&A.

"Tom (Rutledge, Charter's CEO)and I have both spokenextensively about that," he said. "The reason to do M&A isbecause you think you can grow things faster and make money thatway."

Wunderlich Securities analyst Matthew Harrigan interpretedthe comments on Tuesday as being, "entirely consistent withCharter having done a lot of thinking about how to do a deal."

Cable billionaire John Malone, who controls Liberty MediaCorp, has been talking up the need for consolidation inthe cable industry since he jumped backed into the U.S. cablemarket by buying about a quarter stake in Charter last spring.The U.S. cable TV market is mature and faces rising programmingcosts and the continued loss of video subscribers.

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