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  5. CHTR: What are your thoughts of CHTR pre-merger and post merger with liberty global, thanks. [Charter Communications Inc.]
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Q: What are your thoughts of CHTR pre-merger and post merger with liberty global, thanks.
Asked by MG on January 03, 2025
5i Research Answer:

CHTR is expected to merge with LBRDK/LBRDA, rather than LBTYA. A quick history: LBRDK/LBRDA is one of the largest shareholders of CHTR, the market always valued LBRDK’s holdings in CHTR at a 30%-40% discount to the market value of CHTR shares. The purpose of the transaction is to narrow the valuation discount that LBRDK/LBRDA consistently experienced. The transaction is expected to close in 2027.

Nothing has fundamentally changed in CHTR’s business model; the company is still in the capex cycle amid tough competition with fiber. Capital investment is expected to come down over the next few years gradually. CHTR is trading at a cheap valuation, that being said, we think the prospects for the cable industry is not bright here, despite cheap valuations.

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