Comcast Corp. and Time Warner are making a $7 billion offer for Time Warner that will bring the combined company’s revenue and earnings per share to about $8.50 per share.
That compares with Comcast’s current revenue of $10.10 per share and its current earnings per common share of $8 per share, according to data from FactSet.
The deal, which also includes other synergies, could create Comcast as the second-largest pay-TV provider in the United States, behind only Verizon Communications Inc. Comcast’s shares fell 1.7 percent in after-hours trading Tuesday.
Time Warner’s shares rose 3.4 percent in premarket trading.
The combined company could also be the biggest pay-television provider in America by the end of 2021, according the analysts at FactSet, which includes Comcast.
Comcast CEO Brian Roberts and Time Wilson president/CEO Tom Rutledge have said the deal will create the biggest combined pay-tv company in the world, surpassing Verizon and Charter Communications Inc.’s combined company.
Time Wilson shares have dropped 6.7% since Monday’s news.
The offer is being led by Comcast’s billionaire chairman, Comcast Corp., with the help of Comcast’s top executive, Comcast CFO David Cohen.
The transaction could be completed by the close of trading Tuesday, said FactSet analysts, who have an average price target of $15 per share for Comcast.
Time’s stock has fallen nearly 40% since Roberts’ January appointment as CEO.
Comcast shares have been rising steadily, rising above $50 a share in early 2016.
In the 12 months through May, Comcast had net income of $3.3 billion, while Time’s net income was $1.7 billion, according FactSet data.
The two companies have a combined market capitalization of $30 billion.
The companies had combined total revenues of $14.7 bn during the 12-month period ending May 31.
Time will be spun off from Comcast as part of the deal, with the Comcast business that includes Comcast SportsNet, which is owned by the NFL, expected to be sold to Charter.