On the 26th of May, news reported that Time Warner Cable will be bought by Charter Communications for $55bn or $195 a share. After the drop out of Comcast from the acquisition, Time Warner Cable have been approached by Charter Communications, which is the third largest cable television provider. The deal shows how consolidation is becoming increasingly important in the Media Industry. The new giant will have to pass by the difficult waters of regulators, which have previously led the Comcast-TWC deal to a stalemate, and further to the drop out of Comcast. TWC’s share soared after the news considering the premium Charter is willing to pay to seal the deal. In Merger Arbitrage, normally the target company’s shares soar following the news, and adjust to the price proposed by the acquiror, while the acquiror’s shares tend to decline.
Today, Greece was supposed to pay back $335m to IMF. Unfortunately, due to apparent impasses in the discussions between Greece and creditors, the repayment had to be postponed to the end of the month. Only Zambia in the 80s postponed an IMF payment. Tsipras said that it will be attached to other three tranches, totaling approximately €1.6bn. The stalemate is caused by disagreement on the reforms to be backed to the financing line. Alexis Tsipras cannot disrupt his political line to seal the deal. Syriza, his political party, is looking grudgingly at its leader, scared that he could accept unfavorable conditions to secure the loan, which would undermine the party’s coherence with electorate. Markets are nervous in this moment, with tornados taking place in the bond market. ECB’s President, Mario Draghi warned about volatility yet to come.
Today, another important data will be the job report in USA. Job Market is a very important metrics for the definition of Monetary policies in US. The data will be published in early afternoon.
The ESCP Europe Finance Society is the largest and most active student association of the London Campus of the ESCP Europe Business School, it has been founded in 2012 and is composed by students interested in the Finance Industry. All the founders and the managing members have had internship experiences in the field.