Charter Communications (NASDAQ:CHTR) has offered to buy Time Warner Cable (UNKNOWN:TWC.DL) in a blockbuster deal that would combine the second and fourth largest American cable operators.

The offer consists of about $83 in cash plus $47 of Charter stock per Time Warner Cable share. Accounting for Time Warner Cable's $25 billion of net debt, the enterprise value of this arrangement works out to roughly $61 billion. Charter is the smaller company in this proposed merger, with market cap and enterprise value less than half of Time Warner Cable's.

Time Warner Cable's stock didn't move much on the news, having traded above $130 since November. Charter says the high stock price rests on leaks and rumors about Charter's interest, and that the expected buyout premium has already been priced into Time Warner Cable's stock.

In a letter addressed to Time Warner Cable CEO Robert Marcus, Charter CEO Tom Rutledge noted that the companies have talked about a combination since June without reaching any agreement. Rutledge wants to return to the negotiating table and hammer out an agreement and is "preserving all options going forward."

However, he is also prepared to take this deal structure directly to Time Warner Cable's shareholders as a hostile takeover bid, with or without having Time Warner Cable's management agree to terms.

Charter said it has secured financing for the entire proposal and wants to "finalize a deal on an extremely expedited basis," because "time is of the essence."