By Liana B. Baker and Claire Ruckin
SAN FRANCISCO/LONDON (Reuters) - French telecommunications group Altice SA is talking to several banks about raising debt for a potential bid for Time Warner Cable Inc, the second-largest U.S. cable operator, according to people familiar with the matter.
The talks are an important step for Altice in putting together a bid for Time Warner Cable, which is also being courted by Charter Communications Inc after Comcast Corp abandoned its $45.2 billion offer for Time Warner Cable last month over U.S. antitrust concerns.
Altice is in discussions with banks including JPMorgan Chase & Co, Nomura Co Ltd, BNP Paribas SA, Societe Generale, Barclays Plc and Royal Bank of Canada about a financing package to support a proposed acquisition, the people said.
The size of the package has yet to be determined and there is no certainty that a bid will materialize, some of the people said. The financing could comprise of a dollar-denominated high-yield bond, as well as loans, according to one of the sources. The sources asked not to be identified because the talks are confidential.
Shares of Time Warner Cable rose 2.7 percent to $170.0 in Friday morning trade in New York, giving the company a market capitalization of about $48 billion. Shares of Altice were up 2.5 percent at 130.9 euros in Amsterdam, valuing the company at around $32 billion.
Earlier this week, Altice agreed to buy U.S. regional cable company Suddenlink Communications for $9.1 billion from private equity investors, making a first move across the Atlantic.
After spending 36 billion euros ($40 billion) on acquisitions in the past 18 months, Altice will have to be mindful of its finances, according to credit analysts. The Moody's rating agency put Altice under review for a possible downgrade this week, following the Suddenlink deal.
"They would probably need to issue equity if they want to do a big deal in the next twelve months," said Osant Jaeger, a credit analyst at Moody's.
Altice's controlling shareholder Patrick Drahi and Time Warner Cable Chief Executive Robert Marcus met in New York on Wednesday as part of preliminary talks between the two companies, according to two of the sources.
Altice and Time Warner Cable declined to comment. Representatives for the banks either declined to comment or did not respond immediately to requests for comment.
(Additional reporting by Leila Abboud in Paris, Arno Schuetze in Frankfurt and Robert Smith in London; Editing by Tiffany Wu)