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

By Liana B. Baker

Nov 5 (Reuters) - Charter Communications Inc finance chief Chris Winfrey said on Tuesday he and Chief Executive Tom Rutledge have talked about potential mergers and acquisitions that would take advantage of the "unique position" the cable operator has because of its tax assets.

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

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

The remarks were made in response to a question about how Charter's tax assets would work if Charter merged with a larger cable 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 without restrictions, according to a Barclays research note dated July 30.

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

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

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

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