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Charter Stock Soars on Renewed Softbank Speculation

Charter Communications stock was up more than 7% in early trading Monday as speculation concerning a possible deal with Japanese wireless giant Softbank, rejected just months ago, has been rekindled.

Charter stock was trading as high as $361.28 per share (up 7.7% or $25.85 each) after CNBC reported that Softbank chairman Masayoshi Son was willing to come back to the table with the cable company. Softbank had made overtures to Charter in July, which were rebuffed by the cable operator and its largest individual shareholder Liberty Media. Softbank later turned its attention to moving forward with the T-Mobile merger. Now that those talks are off too, CNBC said Son is willing to restart his Charter efforts.

According to CNBC, Liberty, which owns about 27% of Charter, is interested in a combination, while Charter management is not.

Charter declined to comment.

Pivotal Research Group CEO and senior media & communications analyst Jeff Wlodarczak was skeptical about Liberty’s interest in a deal, particularly because Sprint’s equity is so volatile. And he wondered why either would want to rush into a deal.

“I don’t see why Liberty would be interested in taking Sprint/Softbank equity,” Wlodarczak said in an e-mail message. “The US wireless business is going to get uglier and uglier, precipitated partly by the aggressive entrance of cable into wireless utilizing favorable MVNO’s.  A better move – and far more likely – is cable in a couple of years after a competitive implosion in wireless, buying a U.S. wireless operator at a healthy discount to current multiples.”