Time Warner Cable mum on deals; Target follows Dollar Tree's move; Odyssey bid viewed fair

By Cristal Cody

Tupelo, Miss., Sept. 10 - Time Warner Cable Inc.'s chief executive officer on Thursday stayed mum on the company's deal activity with Comcast Corp. or other companies but did say big transactions would be hard to complete in the current business climate.

Also, Time Warner Cable CEO Glenn Britt said that wireless broadband provider Clearwire Corp., which already has received investments from the cable company and others, needs more money.

Elsewhere on Thursday, Target Corp. said it would declassify its board of directors' election structure, just a week after Dollar Tree, Inc. said it would recommend shareholders do the same.

Meanwhile, Odyssey Re Holdings Corp.'s minority shareholders may try to hold out for a higher bid, a market source said Thursday.

On Wall Street, stocks continued a weeklong rally.

The Dow Jones Industrial Average gained 80.26 points, or 0.84%, to 9,627.48.

The Standard & Poor's 500 index added 10.77 points, or 1.04%, to 1,044.14, and the Nasdaq Composite index closed up 23.63 points, or 1.15%, at 2,084.02.

Time Warner Cable

Market buzz on Thursday pitched Comcast and Time Warner Cable together.

"I'm not allowed to comment" on whether the nation's second-largest cable company was looking for acquisitions, Britt said Thursday at a webcast of Bank of America-Merrill Lynch's investor conference.

In May, Time Warner Cable also was seen as a potential buyer of Bethpage, N.Y.-based Cablevision Systems Corp.'s cable assets.

Britt said that big deals would be hard to clear under the current Federal Communications Commission.

"We have a new administration in Washington - they don't appear to be terribly friendly toward big consolidation mergers," he said. "Big consolidating mergers are going to have a tough time."

Meanwhile, Time Warner Cable probably will have to invest more funds in Clearwire, Britt said.

Kirkland, Wash.-based Clearwire's strategic investors include Intel Corp., Comcast, Sprint Nextel Corp., Google Inc. and cable operator Bright House Networks.

"Clearwire needs more money," Britt said at the conference. "We knew that when we invested. The question is where that comes from. A successful company will raise money and Clearwire management has to do that. But at the end of the day, if we have to put [in] some money to keep it going, we will."

Shares of Clearwire climbed 98 cents, or 13.01%, to $8.51 on Thursday.

An analyst told Prospect News on Thursday that the stock is considered fairly volatile.

"That stock moves around like that on a normal basis. In our view, it's not outside the normal range," the analyst said.

New York-based Time Warner Cable's stock gained $1.69, or 4.30%, to close Thursday at $40.95.

Philadelphia-based Comcast shares rose 30 cents, or 1.78%, to close at $17.15.

Cablevision's stock added 35 cents, or 1.46%, to $24.37.

Target responds to concerns

Target said on Thursday that its board agreed to declassify its structure to allow an annual election of directors.

Shareholders will vote on the amendment at the 2010 annual meeting.

Target won a heated proxy fight earlier this year against shareholder Pershing Square Capital Management LP manager William Ackman, who made several criticisms of the company.

"The move to declassify the board is a good thing from a corporate governance perspective," Joe Feldman, an analyst with Telsey Advisory Group LLC, said in an interview Thursday.

"It was a good issue that Ackman had raised during the proxy battle. It's always more healthy for the board to have the opportunity to bring in new members," he said. "Just last week, Dollar Tree voted to declassify their board."

Dollar Tree said on Sept. 3 it would recommend shareholders declassify its board structure at the discount retailer's 2010 annual meeting.

Feldman doesn't think the move will become a trend.

"It just shows a little more independence instead of a few people controlling the entire company, which is more difficult when the board is not declassified," he said.

Shares of Minneapolis-based Target added 52 cents, or 1.09%, to close at $48.17 on Thursday.

Dollar Tree shares closed up $1.12, or 2.28%, at $50.30.

Odyssey offer 'fair'

Meanwhile, a market source said Thursday that Fairfax Financial Holdings Ltd.'s $60.00-a-share offer for Odyssey Re is fair, but shareholders may want more for the company.

"A further 10% bump in the offer price cannot be ruled out if shareholders decide to hold out for more," the market observer said.

Stamford, Conn.-based reinsurance underwriter Odyssey Re is reviewing the offer.

Fairfax Financial already owns 72.60% of Odyssey Re's outstanding stock and appears "strongly committed to taking" Odyssey Re private, the market source said.

Toronto-based Fairfax plans to sell $1 billion in new shares to fund the buyout.

Shares of Odyssey Re rose 9 cents, or 0.14%, to $62.49 on Thursday.

Fairfax shares closed up $4.05, or 1.19%, at $343.85.

Mentioned in this article:

Cablevision Systems Corp. NYSE: CVC

Clearwire Corp. Nasdaq: CLWR

Comcast Corp. Nasdaq: CMCSA

Dollar Tree, Inc. Nasdaq: DLTR

Fairfax Financial Holdings Ltd. NYSE: FFH

Odyssey Re Holdings Corp. NYSE: ORH

Target Corp. NYSE: TGT

Time Warner Cable Inc. NYSE: TWC

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