The New York metropolitan area is considered as the most attractive USA cable market as characterized by affluence and population density.
His deal for Newsday’s parent, Bethpage-based Cablevision Systems Corp., counts on operational cost reductions plus a growing appetite for broadband service outweighing accelerating losses in high-value video subscribers.
Shares of Cablevision jumped 16 percent to US$33.12 in after-hours trading on Wednesday. The deal does not include debts of the New York-headquartered company. Dolans now controls Cablevision, AMC Networks, and The Madison Square Garden Company, which was once a part of Cablevision.
The deal between Altice and Cablevision will create the number four cable operator in the USA market. The company has always been a pillar and pioneer of the cable business, founded in 1973 with 1,500 customers on Long Island.
Altice, run by billionaire investor Patrick Drahi, has become a prolific consolidator on both sides of the Atlantic.
Mr Drahi entered the U.S. in May by buying small regional cable group Suddenlink for $9.1 billion and had declared he would make more acquisitions so as eventually to earn half of Altice’s revenue there. Cash reserves as well as new and existing debt amounting to $14.5 billion will finance the deal. That’s likely to drive Altice to explore investments in other US industries, said Craig Moffett, an industry analyst at MoffettNathanson.
Drahi also had an eye on US’ second-biggest cable operator Time Warner cable (TWC), after the latter’s $45-billion merger with Comcast collapsed because of regulatory concerns.
The group is the parent company of French cable operator Numericable, and has already invested in 2014 in daily newspaper Libération. AT&T recently closed on a $48.5 billion purchase of satellite TV company DirecTV. “We believe that 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”, said Cablevision CEO James Dolan.
“The strategy of Altice in the large and highly strategic U.S. market is reinforced with the acquisition of Cablevision”.