Paulson Pleased With Comcast-Time Warner Cable Deal

Feb 14 2014 | 11:13am ET

Paulson & Co. is a big fan of Comcast Corp.'s proposed $45 billion takeover of Time Warner Cable—and has at least 200 million good reasons for it.

The New York-based hedge fund said yesterday that the merger is "the best possible outcome for TWC shareholders." Paulson itself is a big one, among TWC's top 10 with some six million shares.

The hedge fund bought two-thirds of that stake during the third quarter, when TWC shares were going for about $112 each. Comcast has pledged to pay $158.50 per share in the all-stock deal, meaning that Paulson would earn almost $200 million on those four million shares alone.

In an interview yesterday with The Wall Street Journal, firm founder John Paulson said Comcast was "always the most logical acquirer," and that he didn't see "any reason why this deal would be blocked."

Paulson said the mega-deal presages "further consolidation" in the cable television industry, noting that Charter Communications—an early suitor for TWC—could buy the roughly three million subscribers Comcast will have to jettison to meet regulatory muster. And he suggested that he wouldn't simply take Comcast's stock and run.

"We stayed in MetroPCS after the T-Mobile deal," he noted. "We still hold our stake. I would think it would be very attractive to hold Comcast post-merger as well. At the end of the day, the earnings-per-share and cash-flow-per-share should grow more for Comcast with Time Warner Cable than it would as just Comcast alone."

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