Citing people familiar with the deal, the news agency said Charter is trying to hammer out the details of a plan that could be approved by Time Warner’s shareholders.
The report said John Malone's Liberty Media Corp (LMCA), which owns about a quarter of Charter, approached Time Warner earlier this year about merging Charter and Time Warner but was rebuffed.
Time Warner’s market value is more than $34 billion, while Charter's market value is about $13 billion. Time Warner is the second largest U.S. cable provider behind Comcast Corp. (CMCSA) with about 12 million customers. Charter is the fourth largest provider.
Time Warner’s stock closed up 7 cents, or 0.10% at $68.81. Charter’s stock rose $4.03, or 3%, to $138.07, but had slipped in after-hours trading.
Spokesmen at Charter and Time Warner declined to comment.
Reuters said Charter hopes that Time Warner's weak third-quarter operating performance could make the company more open to a bid.
Charter, according to Reuters’ sources, is working with its advisers on a deal structure which could add pressure on Time Warner's management to negotiate a merger.