European telecom group Altice has reached a definitive agreement to acquire US operator Cablevision Systems for USD 17.7 billion in cash, at USD 34.90 per share. This is Altice’s second step in the US market, after its announced acquisition of Suddenlink in May. Altice writes that Cablevision and Suddenlink combined represent the fourth largest cable operation in the US, with 4.6 million customers in 20 states. The shareholders of Cablevision, which is owned by the Dolan family, have approved the transaction, said CEO James Dolan. The family will still own AMC Networks and Madison Square Garden after the Cablevision sale.
Cablevision is the leading cabler in the New York metro area (New York, New Jersey, Connecticut) and has 3.1 million residential and business customers out of over 5 million premises passed. About 65 percent of Cablevision’s cable homes take triple-play services. The company turned over USD 6.53 billion of revenue in the 12 months to 30 June, including USD 6.21 billion from its cable and Lightpath businesses.
The acquisition also includes the business services unit Lightpath, advertising sales division Cablevision Media Sales, the News 12 Networks, and the Newsday weekly and New York daily newspapers.
The transaction will be financed with USD 14.5 billion of new and existing debt at Cablevision, cash on hand at Cablevision and USD 3.3 billion of cash from Altice. BC Partners and CPP Investment board have an option to participate for up to 30 percent of Cablevision. Altice intends to raise equity by issuing Class A shares and has received full financing commitments from JP Morgan, BNP Paribas and Barclays. The transaction is expected to close in the first half of next year. Cablevision has agreed that it would not pay any quarterly dividends from now to closing.
