Altice Snaps Up Cablevision

September 17th, 2015 by · 7 Comments

Altice has struck again in the US, and this time they hit a bigger target. The European telecommunications group has agreed to buy Cablevision in a $17.7B deal. The deal will pay out $34.90 per share, a 22% premium above the current stock price.

Earlier this year Altice surprised the market with plans to purchase Suddenlink in one of the first significant M&A forays by a European operator on this side of the Atlantic since the dot com bubble. But once the move had been made, it was clear that more would be coming from Altice. Supposedly they took a hard look at TW Cable, and some even suggested Verizon’s wireline business could fit, but Cablevision makes a whole lot more sense to me.

In buying Cablevision, Altice buys a significant but very geographically focused asset, with cable systems in New York, New Jersey, and Connecticut reaching 3.1M customers. In the same geography they also get to own Lightpath, which has a deep footprint more than 7,000 lit buildings and 5,800 route miles of fiber that reaches deep into both the SMB and larger enterprise markets. Interestingly, they also get to own the newspaper ‘Newsday’ and the local news channel News 12 Networks.

As with the Suddenlink purchase, this probably is not the end of the story. Altice will surely be looking for additional cable assets to consolidate into its US footprint.  And while his first two have been cable operators, I don’t think it’s a stretch to see him looking at other infrastructure assets as well.

The deal will be financed via a combination of cash and shares, with the investment funds BC Partners and CPP Investment Board agreeing to buy up to 1/3 of Cablevision to help make it happen.  It will take some regulatory scrutiny of course, but I doubt there will be objections.

And so, Cablevision customers will probably soon exchange a fiery but ultimately conservative Irish-American billionaire patriarch, John Dolan, for a similarly fiery but rather unpredictable French-Israeli billionaire patriarch, Patrick Drahi.

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Categories: Cable · Fiber Networks · Mergers and Acquisitions

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7 Comments So Far

  • Anthony Shivers says:

    i no is change customer .cablevision is sold to altice .it be channels change .who. Bill like informaci. about altice. Sir. here you soon thank you

  • Sad Day says:

    Too Bad. Don’t know the politics, but as a residential end user I can say this. Their network performs extremely well. Their tech support was based in USA, with very low wait times, were fairly knowledgable and spoke great English. They showed up on time for every appointment – my experience anyway. They didn’t engineer choke points on purpose, as far as I could tell – since the performance has always been great.

    So, it was probably just a matter of time before someone stepped in to chop, hack, under-staff, oversubscribe, and lower the over all performance of the network to meet the same low standards of the rest of the operators. Then once they get it there, this guy will turn it over to one of the other big players at a hefty profit.

    This is the only way one of the bigger players could take over cablevision……get customers use to crappy performance so when one of the big dogs want it, it’ll be parity – crappy – service and the opposition will be very low from consumer.

    Right out of the PE/hedgefund play book.

  • Another Rich D-Bag says:

    “I don’t like to pay salaries. I pay as little as I can.” says Patrick Drahi quoted in Bloomberg.

    That has to be more than enough proof of what a D-bag this guy must be. Although it’s also the style that made Carnegie one of the richest D-bag’s in history. No soup for you peons! You are now surfs to international oligarchs.

    Good luck to the hard working peeps at Cable vision.

  • Adam says:

    “I don’t like to pay salaries. I pay as little as I can.” says Patrick Drahi quoted in Bloomberg.

    And like most ‘Merican drones, you believe what the media fed you. Drahi continued to say “I prefer to include our people in our earnings and future”. Meaning he likes to pay in stocks…..which I am sure you said on some other forum is another trick the rich use to get richer. Or use to make the poor poorer, or they are greedy, or BIG business is killing us, or any of the other drivel you may have picked up while reading one of your liberal rags/..

    Truth is, you move from the middle class to the upper class or become “greedy rich people” when you earn this type of compensation. We should all be so lucky.

  • Paul says:

    Rob, the name of Cablevision’s patriarch is actually Chuck Dolan.

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