Europe’s Altice buying Cablevision as it expands in US

Once consolidated, the merged Cablevision-Suddenlink entity will be the fourth largest US cableco by subscribers, Altice claims. Cablevision provides services to approximately three million homes mostly in New York, Connecticut and New Jersey.

The deal, which needs approval from regulators, is expected to close by mid-2016. This is Altice’s second step in the US market, after its announced acquisition of Suddenlink in May. The value of the deal comes to $34.90 a share, which is a 22% premium over Wednesday’s closing price.

Cablevision’s shares are up about 16 percent in pre-market trading on Thursday. The company said it was putting $3.3 billion of cash into the deal, while the remainder of the acquisition would be financed by Cablevision cash and debt.

Early this month Wunderlich Securities Matthew Harrigan said that Cablevision “could be a very appealing asset” for Altice given its presence in New York, and ambitious plans to spread public WiFi services through the region.

Altice will pay $17.7 billion to buy Cablevision from the Dolan family, which also owns Madison Square Garden. JP Morgan, BNP Paribas and Barclays have committed to financing the deal and also advised Altice on it. Cablevision was advised by Bank of America Merrill Lynch, Guggenheim Securities and PJT Partners. The company owns money-losing New York-area newspaper Newsday and TV station News 12, and Altice has committed to funding them, according to a person familiar with the matter. Then, buy Suddenlink, the seventh largest regional cable TV station for $9.1 billion. The company generated a revenue of $6.5 billion in 2014, with a net income of $311 million. AT&T recently closed on its purchase of DirecTV and Charter acquired Time Warner in two of the latest consolidations.

Altice, which is led by the French billionaire Patrick Drahi, has been on a buying spree lately.

As part of Altice, it is hoped Cablevision stands to benefit from additional international operational expertise, enhanced scale and further investment support.

“We expect that Cablevision will be in excellent hands”, he said.

“The strategy of Altice in the large and highly strategic US market is reinforced with the acquisition of Cablevision”, said Patrick Drahi, Founder and President of Altice.