Four months after entering the U.S. cable market with a $9.1 billion offer to acquire St. Louis-based Suddenlink Communications, Altice—the fast-rising European cable conglomerate controlled by Patrick Drahi—unveiled plans yesterday to acquire Cablevision in a cash and debt transaction valuing Cablevision at $17.7 billion.
Announced in the midst of an ongoing flurry of merger activity among key players in the U.S. cable industry, the proposed acquisition, if approved, would end the Dolan family’s stewardship of Cablevision more than four decades after Charles Dolan founded the company in 1973. Although Cablevision serves more than three million cable and broadband subscribers in the lucrative New York City market, the company has struggled to maintain its competitive footing against Verizon’s FiOS TV service and other video service providers in that area. In a press statement, Cablevision CEO James Dolan thus explained that “the time is right for new ownership,” as he voiced confidence that “Patrick Drahi and Altice will be truly worthy successors.” Meanwhile, when combined with the Suddenlink deal, the transaction offers Altice the opportunity to catapult itself to the rank of the fourth-largest cable operator in the U.S. with 4.6 million customers across 20 states in the Midwest and Northeast. While the capital structures of Cablevision and Suddenlink would be kept separate, an Altice spokesman confirmed that the units would draw on management from both companies.
Under the terms of the agreement, Altice would pay $34.90 for each Class A and Class B share of Cablevision stock. (Members of the Dolan family currently control 72% of the voting stock of Cablevision.) Although the deal also includes Cablevision’s Lightpath business services unit and the Cablevision-owned Newsday Media Group and News 12 Networks, other Cablevision assets such as AMC Networks and the Madison Square Garden Company will remain in Dolan family hands.
Contingent upon receipt of FCC and other required approvals, the parties aim to complete the transaction by mid-2016. Declaring, “the strategy of Altice in the large and highly strategic U.S. market is reinforced with the acquisition of Cablevision,” Drahi proclaimed: “we will be in a stronger position . . . to deliver the best services, invest in the most advanced technology, and deliver innovative products for the benefit of our customers.”