Charter strikes $10.4-billion deal to buy Bright House

Charter Communications has structured a $10.4-billion deal to buy Bright House Networks -- the latest domino to fall in a rapidly consolidating cable television and Internet service landscape.

Bright House Networks is the nation’s sixth-largest cable operator, with about 2.5 million subscribers, including in the fast-growing regions of Tampa and Orlando, Fla. The company also serves Bakersfield, Calif., and other communities in the Midwest and Southeast.

The complicated transaction, announced Tuesday, includes Charter contributing $2 billion in cash to Bright House as well as shares in a newly consolidated company that would be 73.7% owned by Charter. Bright House, which is owned by Advance/Newhouse Partnership, would own 26.3% of the proposed new entity.

“We are acquiring Bright House for an attractive price,” Tom Rutledge, chief executive of Charter Communications, told Wall Street analysts on an early morning conference call.

The move would further Charter’s ambitious plans to expand amid an increasingly competitive chase for customers who have more digital options for their entertainment. The industy is in the throes of rapid consolidation.

Last year, the nation’s largest cable operator, Comcast Corp., offered $45 billion for Time Warner Cable. Telecommunications giant AT&T quickly entered into a separate deal to buy DirecTV, based in El Segundo, for $49 billion.

The Bright House deal, along with another pending transaction, would give Charter about 10 million customers in the U.S. It would cement Charter’s status as a heavyweight in the pay-TV and high-speed Internet service industry.

The deal is contingent on several factors, including approval by Charter shareholders and the closing of a separate deal that Charter entered into last year with Comcast Corp.

In that deal, Charter agreed to swap subscribers in some markets with Comcast, which is in the process of trying to win federal approval to complete its takeover of Time Warner Cable. If the Comcast deal is approved, Comcast would pick up roughly 300,000 subscribers in the Los Angeles region now served by Charter.

Charter’s proposed acquisition of Bright House also requires federal and state regulatory approvals.

Twitter: @MegJamesLAT