Altice Group, a European telecom company controlled by French cable entrepreneur Patrick Drahi, has agreed to buy U.S. cable operator Cablevision (CVC) in a deal valued at $17.7 billion.
Not including Cablevision’s debt, Altice will pay about $10 billion in cash — or $34.90 per share — for the Bethpage, N.Y.-based company that is controlled by the Dolan family
The deal would create the fourth largest cable operator in the U.S. market, the companies said. The acquisition also includes Newsday Media Group, publisher of Newsday and amNewYork. The deal doesn’t include the Madison Square Garden Company, which is also controlled by the Dolans and owns the New York Knicks and Rangers and their home arena in Manhattan.
Shares of Cablevision ended Wednesday down a penny to $28.54 in regular-hour trading. Shares zoomed 16% to $33.25 in pre-market.
In May, Altice, headquartered in the Netherlands, entered the U.S. by agreeing to buy cable operator Suddenlink Communications in a deal valued at $9.1 billion. Drahi, Altice’s chairman, said a month later that he was not done dealing here and that he was interested in expanding the company’s revenue in the world’s largest TV and Internet market.
Amy Yong, an analyst at Macquarie Group, told USA TODAY earlier this month that Cablevision, which serves cable Internet and TV customers in the New York region, was widely seen as an attractive acquisition target and investors were expecting an imminent deal. “In the last (Cablevision earnings) call, a lot of people read from the body language that it’s something they’re looking into,” she said.
Despite the industry challenges triggered by cord-cutting and the TV revolution, broadband Internet growth remains strong as more consumers access all types of content over digital platforms, Yong said Wednesday. “One of Cablevision’s advantages is they serve a premium media market — New York City. I think Altice is probably confident they could take out a lot of cost synergies, which we estimate is $350 million plus.”
SOURCE: Roger Yu