The Zacks Analyst Blog Highlights: Comcast, Time Warner Cable, Charter Communications, Liberty Media and Eni SpA

Zacks

For Immediate Release
 
Chicago, IL – April 23, 2014 – Zacks.com announces the list of stocks featured in the Analyst Blog. Every day the Zacks Equity Research analysts discuss the latest news and events impacting stocks and the financial markets. Stocks recently featured in the blog include the Comcast Corp. (CMCSA-Free Report), Time Warner Cable Inc. (TWC-Free Report), Charter Communications Inc. (CHTR-Free Report), Liberty Media Corp. (LMCA-Free Report) and Eni SpA (E-Free Report).
 
Today, Zacks is promoting its ''Buy'' stock recommendations. Get #1Stock of the Day pick for free.

Here are highlights from Tuesday’s Analyst Blog:

Comcast, Charter Negotiate Divestitures

Comcast Corp. (CMCSA-Free Report) is exploring several options to get regulatory approval of its proposed acquisition of Time Warner Cable Inc. (TWC-Free Report). Recently, both the Financial Times and Reuters reported that Comcast is negotiating with Charter Communications Inc. (CHTR-Free Report) to divest around 3 million video subscribers of the combined Comcast-Time Warner Cable entity.
 
In Feb 2014, Comcast reached an agreement with Time Warner Cable to acquire the latter in an all-stock deal valued at around $45.3 billion. Liberty Media Corp. (LMCA-Free Report), which controls a 27.3% stake in Charter Communications, was also aggressively pursuing the idea of Charter Communications taking over Time Warner Cable. However, it lost to Comcast in the bid.
 
The merged entity of Comcast and Time Warner Cable will have around 33 million pay-TV (video), 32 million high-speed broadband (Internet) and 16 million telephony (voice) subscribers. The deal is expected to face tough scrutiny and close monitoring by regulator, Federal Communications Commission (:FCC) and is expected to close within a year.
 
In order to avoid antitrust restriction, Comcast has decided to divest around 3 million Time Warner Cable video subscribers to maintain its total market share at 30% of the U.S. pay-TV industry. Several industry researchers have valued these 3 million subscribers between $18 billion - $20 billion.
 
The FCC may also ask Comcast to spin-off these subscribers as a separate entity. If Charter Communications takes over that part, it will create another formidable player in the U.S. cable TV market with the fourth largest subscriber base. Notably, Charter Communications currently has approximately 4.2 million subscribers.

We believe that this deal will benefit both the companies. Comcast can avoid antitrust measurers. The company already assures FCC that its merger with Time Warner Cable will not result in higher prices for cable TV and high-speed Internet packages. On the other hand, Charter Communications will achieve necessary scale to remain competitive in the intensely competitive U.S. pay-TV market.      
 
Currently, Comcast, Time Warner Cable, Charter Communications and Liberty Media, all carry a Zacks Rank #3 (Hold).
 
Eni to Start Bids on FLNG Vessel
 
Italian major, Eni SpA’s (E-Free Report) share price rose by 0.3% on the news that it is preparing to issue bid documents relating to a multi-billion-dollar floating liquefied natural gas (:FLNG) vessel within weeks. The vessel is likely to be employed in Area 4 off northern Mozambique.
 
A minimum of four consortia is likely to receive bid documents this month itself to take part in Eni’s debut FLNG development. It will be the second to be launched in Africa after Ophir Energy’s Block R project in Equatorial Guinea.
 
The definite set of contenders includes South Korea’s three major yards and a Japanese yard. All these contestants will be linked to Asian, American and European engineering and construction companies. Per market sources, another consortium, probably Chinese, may also participate, but no confirmation has been received yet.
 
The bidding battle will be among Daewoo Shipbuilding & Heavy Engineering, which has linked up with KBR, Samsung Heavy Industries, which has teamed up with Technip and JGC, and Hyundai Heavy Industries with its allies Chiyoda and Saipem.
 
Sources revealed that the Japanese consortium is being led by Ishikawajima-Harima Heavy Industries, which has teamed up with Modec, Toyo Engineering and CB&I. The fifth consortium, as hinted by some sources, could engage all or some of Wison Offshore & Marine, Yinson and Offshore Oil Engineering Corporation.
 
Another source revealed that Eni’s initial bid documents are likely to call for a front-end engineering and design competition, which would continue for a year before the operator invites at least two rival groups to tender price offers.
 
The winner of this prestigious contract would be well positioned to receive more work for Eni off Mozambique where the operator has recognized the need for two more FLNG vessels.

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