Charter Communications is in discussions to acquire Bright House Networks, according to Bloomberg based on information from people familiar with the situation.

The stock price of Charter Communications increase more than 5% to $193.45 on Tuesday.The company has approximately $21.34 billion market capitalization.

Charter Communications

Charter, Bright House agreed on a potential all-stock deal

The report indicated that the managements of Charter Communications and Bright House Networks have been engaged in negotiations regarding a potential acquisition for months.

According to two sources, Charter Communications and Bright House Networks already agreed on an outline for the potential all-stock transaction. The sources requested anonymity due to the private nature of the discussion.

Newhouse Advance Publications owns Bright House Networks, which has around 2.5 million cable subscribers in California, Florida and Michigan. If Charter Communications offered a per subscriber value similar to its proposal for Comcast last year, the value of Bright House Networks may be more than $12 billion.

One of the sources suggested that Charter Communications and Bright House Networks are unlikely to announce any agreement before regulators announced their decision on the proposed Comcast-Time Warner Cable merger.

In addition, the person indicated the possibility that Charter Communications and Bright House Networks may not be able to reach a formal acquisition agreement.

Comcast, Time Warner Cable still waiting for regulatory approval

Comcast agreed to acquire Time Warner Cable for $45.2 billion on February last year.  Since then, the companies haven’t received regulatory approvals for the transaction.

Last August, more than 60 organizations representing content producers, consumers, social justice and democracy reform advocates urged the Federal Communications Commission (FCC) to reject the proposed merger of Comcast and Time Warner Cable.  The groups warned that a merger could give Comcast “unprecedented gatekeeper control” over the media and telecommunications sector, and it could result to higher prices and fewer choices for broadband and cable customers.

Last April, Comcast entered into a divestiture agreement with Charter Communications to ease the process of regulatory approvals for its merger with Time Warner Cable. Comcast agreed to divest 3.9 million cable customers of the merged company.