February 14, 2014 (Shareholders Foundation) - An investor who currently holds shares of Time Warner Cable Inc (NYSE:TWC) filed a lawsuit in effort to halt the proposed takeover of Time Warner Cable by Comcast Corporation for a value of approximately $158.82 per share.
The plaintiff alleges that the defendants breached their fiduciary duties owed to NYSE:TWC stockholders arising out of the attempt to sell Time Warner Cable Inc too cheaply via an unfair and self-serving process to Comcast Corporation

On January 13, 2014, Time Warner Cable Inc announced that it received in a generally proposal from Charter Communications to acquire as Time Warner Cable Inc in the “low $130s”. Time Warner Cable Inc said that based on an interview with the CEO of Charter Communications a report stated that the offer was for $132.50, consisting of $83.00 in cash and $49.50 in Charter Communications stock. Time Warner Cable Inc said that Charter Communications had previously offered cash and stock nominally valued at approximately $114 in June and approximately$127 in October. Time Warner Cable Inc said it rejected the offers by Charter Communications.

Then on February 13, 2014, Comcast Corporation and Time Warner Cable announced that their Boards of Directors have approved an agreement for Time Warner Cable to merge with Comcast. Under the terms of the agreement each Time Warner Cable share will be exchanged for 2.875 shares of CMCSA, equal to Time Warner Cable shareholders owning approximately 23 percent of Comcast’s common stock, with a value to Time Warner Cable shareholders of approximately $158.82 per share based on the last closing price of Comcast shares.

However, the plaintiff alleges that the $158.82 -offer is too low and undervalues Time Warner Cable Inc. Indeed, at least one analyst has set the high target price for NYSE:TWC shares at $165.00 per share. Furthermore, Time Warner Cable Inc reported that its annual Total Revenue rose from over $17.86 billion in 2009 to over $21.38 billion in 2012 and its respective Net Income increased from over $1.07 billion to over $2.15 billion. In addition, shares of Time Warner Cable Inc (NYSE:TWC) grew from $29.11 per share in July 2009 to as high as $138.22 per share in November 2013.

The plaintiff claims that since rumors first leaked in mid-2013 about several companies interested in acquiring Time Warner Cable Inc, it has been reported that Time Warner Cable Inc failed to engage in good faith negotiation. Furthermore, the plaintiff alleges that the bid failed to take into account the company’s “positive momentum going forward while Time Warner Cable management would receive “immediate benefits from the closing of the transaction,” including more than $60 million in special payments.

In addition, the plaintiff alleges that in order to lock in the proposed transaction at the allegedly unfair price, the board of directors of Time Warner Cable Inc entered into numerous reclusive and onerous deal protection devices, such as a no solicitation clause and a five business-day matching rights provision

On February 14, 2014, NYSE:TWC shares closed at $146.00 per share.