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Comcast would consider a spinoff of subscribers: source

A Comcast sign is shown in San Francisco, California February 13, 2014. REUTERS/Robert Galbraith
A Comcast sign is shown in San Francisco, California February 13, 2014. REUTERS/Robert Galbraith

By Liana B. Baker

(Reuters) - Comcast is considering spinning off the 3 million subscribers it has offered to divest as part of its proposed $45.2 billion takeover of Time Warner Cable, into a publicly traded company, according to sources familiar with the matter.

The sources, who did not want to be named because the plans are private, said that Comcast had not yet made a decision and this is just one option it is considering. Comcast has said it is willing to divest 3 million subscribers to reduce U.S. regulators' competitive concerns.

Comcast has said it plans to submit documents on its proposed Time Warner Cable acquisition to U.S. regulators by the end of March, when antitrust and public interest reviews will be launched.

The deal has drawn concern from consumer advocates and some lawmakers who worry that the new company's size would give it too much power to decide what Americans can watch on TV and do online.

Comcast may sell the cable systems - whose location has yet to be determined - to a strategic buyer but a spinoff may be more tax efficient to shareholders of the combined company, the person added.

Bloomberg first reported the news of the potential spinoff on Friday.

The sources told Reuters that a spinoff was only one of several possibilities for the subscribers it needs to divest as part of the deal, which a second source said have already attracted interest from potential buyers.

It is not even clear whether the final number of subscribers to be divested will be the same as the three million initially mentioned, the second source said.

Liberty Media Chief Executive Greg Maffei said on Friday that Charter Communications would consider buying the subscribers Comcast is looking to divest. Liberty Media owns 27 percent of Charter.

Representatives from Charter and Time Warner Cable declined to comment while Comcast did not immediately respond to a request for comment.

(Reporting by Liana B. Baker; additional reporting by Alina Selyukh; Editing by Bernard Orr)

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