Altice USA confirms it will buy Telcom Suddenlink –

Altice USA confirms it will buy Telcom Suddenlink –

Cable giant Altice USA has confirmed that it has put its Suddenlink telecom assets up for sale following interest from several buyers.

Altice USA CEO Dexter Goey responded to market talk about a potential sale during an analyst call on Wednesday. “I think we can confirm that the process is ongoing. I don’t think we want to comment on that anymore, just like we did when there were a lot of rumors about Lightpate,” he said after the company sparked widespread interest in Suddenlink’s assets. (In 2020, Altice sold its Lightpath fiber business unit to Morgan Stanley Infrastructure Partners.)

“The time is right to review this… We will update you and the rest of the market as we deem appropriate, but there is nothing further to discuss at this time,” added Goy. The Altice USA director would also not rely on the possible sale price of Suddenlink’s assets.

“Historically, the numbers are there on active, so you can probably work with other analysts to find out what those numbers look like,” added Goy.

Wall Street analysts have said in the past that Cablevision’s Altice, which provides pay-TV, broadband and phone services to about 4.9 million residential and business customers in 21 US states.

Bloomberg reported on July 21 that Altice USA is looking to sell Suddenlink, which operates in the south-central US, for a potential price of $20 billion, including debt, to reduce its debt load.

Craig Moffett, an analyst at MoffettNathanson, argued in a recent note that the price would be high, given the unit’s estimated earnings before interest, taxes, depreciation and amortization of $1.3 billion. “20 billion dollars will be a multiple of 15.4 times. “This may have been a reasonable valuation range in 2020 or 2021, but with inflation rising, interest rates rising and underlying bonds falling, it no longer seems like a reasonable multiple to us,” he wrote.

Moffett also approached potential buyers. “We are skeptical of Charter or Comcast[CMCSA]as potential suitors,” he says. . be non-strategic; the overall scale of none would materially change. Yes, or it could benefit from the synergies that would come from Suddenlink operating more, but Altice’s ultra-low-cost model could actually introduce synergies negative, none in our opinion.Comcast and Charter would choose to run the company in such a sophisticated way.

The analyst also referred to regulatory issues. “While there is no valid argument that a company should or should be prevented from buying a small company like Suddenlink, it is true that any of them would be forced through a long (excruciating?) regulatory process,” he argued. The

“For Cable One, on the other hand, acquiring a company the size of Suddenlink would be transformative in our view,” Moffett wrote. “They have made no secret of their desire to grow, and apart from privately owned Mediacom, there is no other cable operator of any significant size in the country that can reasonably be acquired.” But he warned that “it would not be easy” for the company to make such an acquisition.

“Other cable operators, especially the privately held Cox Communications, are not ruled out,” concluded the MoffettNathanson expert. “But they have not expressed any particular interest in acquisitions. That leaves private capital. Fortunately for Altice, we think there is a pretty strong appetite for all types of broadband investments.”

Source: Hollywood Reporter

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