Time Warner Cable, which filed for its long-awaited IPO today, may compete for customers against rivals that sell services under the Time Warner name, potentially complicating its marketing efforts, according to an SEC filing. That’s only of the points from a 400-page prospectus still being studied by analysts. The line between Time Warner Cable and its current parent company already is blurry. Time Warner will own an 84 percent stake in Time Warner Cable after the IPO, which Bloomberg News says may value the company at $40 billion. In addition, four of Time Warner Cable’s directors, including CEO Glenn Britt, have held positions with Time Warner.
Getting customers to understand how one company differs from another will become an even bigger challenge as competition among cable and telecom providers continues to intensify.
So what does the IPO mean? It’s not the spin off Carl Icahn wanted during his battle with Time Warner management. At least, that’s the case now. Some, including influential media analyst Jessica Reif Cohen of Merrill Lynch, argue that the deal may lead to a bigger spin-off or an outright sale of the business, Time Warner’s fastest-growing unit. Meanwhile, Time Warner and Time Warner Cable won’t make a dime from the sale, the proceeds of which are going to pay off the creditors of Adelphia Communications, which the company purchased in July.
So far, the deal seems to be getting a positive reception on Wall Street. Whether that proves to be the case remains to be the seen.