Cablevision Acquired by European Conglomerate Altice17 Sep, 2015 By: Erik Gruenwedel
$17.7 billion transaction reportedly creates fourth-largest cable operator in the U.S.
Cablevision, the New York-based cable operator controlled by the Dolan family, Sept. 17 formally announced an agreement to be acquired by Altice Group, a multinational cable and telecommunications company with a presence in France, Israel, Belgium & Luxembourg, Portugal, the French West Indies/ Indian Ocean Area and Dominican Republic and Switzerland.
Under the $17.7 billion cash deal, Altice would pay Cablevision $10 billion, or $34.90 per share, with the rest of the funds going to pay down debt. The transaction is expected to close in the first half of 2016, subject to regulatory and other customary approvals.
Altice is no stranger to the United States after acquiring cable operator Suddenlink Communications in May for $9.1 billion. When combined with Cablevision, the companies become the fourth-largest cable operator in the United States, according to Altice.
SNL Kagan analyst Ian Olgeirson said the transaction isn't surprising considering Altice's stated appetite for U.S. cable operators.
"The purchase price falls within our expected parameters and catapults Altice into the No. 5 spot among cable operators with 3.74 million video subs. In the broader U.S. multichannel picture, the combined companies would crack the top 10, but control less than 4% of the overall video subscription share," Olgeirson said in an email.
The transaction also includes Long Island's daily newspaper, Newsday, and its website Newsday.com, as well as amNewYork, the circulated free daily serving New York City. The deal does not include Madison Square Garden or AMC Networks, which Cablevision spun off as a separate company in 2011.
In a statement from James Dolan, CEO of Cablevision, and son of founder Charles Dolan, the executive said the Dolan family would move forward controlling AMC Networks and The Madison Square Garden Company.
“The time is right for new ownership of Cablevision and its considerable assets. We believe that [Altice founder] Patrick Drahi and Altice will be truly worthy successors, and we look forward to doing all we can to affect this transition for our customers and employees. We expect that Cablevision will be in excellent hands,” Dolan said.
Cablevision last month announced a deal with CBS, becoming the media company’s first pay-TV operator to deliver its OTT video services (CBS All Access and Showtime Anytime) to broadband subscribers. Cablevision, which lost 134,000 video subscribers in its most-recent fiscal period, has aggressively sought to soften the exodus through direct-access deals with OTT video services such as Hulu Plus, HBO Now and Netflix.
Cablevision ended the second quarter with 2.6 million video subscribers.