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Comcast said planning to drop offer for Time Warner Cable
[NEW YORK] Comcast Corp is planning to walk away from its proposed takeover of Time Warner Cable Inc, people with knowledge of the matter said, after regulators planned to oppose the deal.
Comcast is planning to make a final decision on its plans Thursday, and a announcement on the deal's fate may come as soon as Friday, said one of the people, who asked not to be named discussing private information.
This week, US Federal Communications Commission staff joined lawyers at the Justice Department in opposing the planned US$45.2 billion transaction. FCC officials told the two biggest US cable companies on Wednesday that they are leaning toward concluding the merger doesn't help consumer consumers, a person with knowledge of the matter said.
An FCC hearing can take months to complete and effectively kill a deal by dragging out the approval process beyond the companies' time frame for completion. Justice Department staff is also leaning against the deal, Bloomberg reported last week.
Comcast shares rose 2.2 per cent to US$60.06 at 3:07 pm in New York, while Time Warner Cable climbed 0.5 per cent.
Sena Fitzmaurice, a spokeswoman for Comcast, declined to comment.
While the DOJ has to present a case in court to block the deal, an FCC hearing referral could prove to be the bigger obstacle to Comcast's bid to expand its cable and Internet footprint.
The last time the FCC staff proposed sending a merger to a hearing was over AT&T Inc's bid to buy T-Mobile USA Inc in 2011, prompting the companies to drop the deal. The Justice Department had already brought a lawsuit seeking to block the merger.
Comcast representatives came away from the FCC meeting with the impression the deal was in trouble, according to a person familiar with the matter.