Charter Communications Inc. “has always been the natural buyer” of Altice USA Inc., according to a Wolfe Research analyst. But could a deal actually happen? Altice
ATUS,
+18.88%
investors seem to be hopeful, with the stock logging more than a 60% two-day gain in the wake of a Bloomberg News report saying that Charter
CHTR,
-0.90%
is working with financial advisers to look into a possible combination. Charter’s stock has dropped about 3% over the same span.
Charter is the top cable player in New York City, according to Wolfe Research, while Altice serves about 6 million homes in the New York region and the broader northeast. Spokespeople for Altice and Charter each said they don’t comment on rumors. Any deal announcement would arrive during tough times for the cable industry. Shares of Spectrum-parent Charter suffered their worst single-day drop on record earlier this month after the company’s last earnings report revealed a drop in broadband subscribers. Cable incumbents face increasing competition from wireless companies that have ramped up their offerings in the U.S. internet market. Optimum-parent Altice, meanwhile, also saw broadband net losses in its latest quarter, with MoffettNathanson analyst commenting at the time that the company faces “quite possibly an insurmountable leverage wall in 2027.”‘Terrible timing’ Charter’s stock is down about 20% since the company’s most recent earnings report, noted Bernstein analyst Laurent Yoon so, in that sense, the company’s possible interest in a deal seems like “terrible timing.” “But then again, these challenges, broadband growth in particular, and potential operating synergies to generate additional cash flows (eventually) may be the reason why they are assessing the potential merits of the transaction,” he continued. Yoon doesn’t see capital-expenditure synergies if the two companies were to combine, but he adds there could be “potential operating synergies in key markets where both CHTR and ATUS operate in contiguous markets with little to no overlap today.” Further, Charter potentially could refinance Altice’s $25 billion in debt at lower rates. But a transaction would potentially bring Charter’s own leverage ratio to 4.7 times, above its …
Article Attribution | Read More at Article Source
ATUS,
+18.88%
investors seem to be hopeful, with the stock logging more than a 60% two-day gain in the wake of a Bloomberg News report saying that Charter
CHTR,
-0.90%
is working with financial advisers to look into a possible combination. Charter’s stock has dropped about 3% over the same span.
Charter is the top cable player in New York City, according to Wolfe Research, while Altice serves about 6 million homes in the New York region and the broader northeast. Spokespeople for Altice and Charter each said they don’t comment on rumors. Any deal announcement would arrive during tough times for the cable industry. Shares of Spectrum-parent Charter suffered their worst single-day drop on record earlier this month after the company’s last earnings report revealed a drop in broadband subscribers. Cable incumbents face increasing competition from wireless companies that have ramped up their offerings in the U.S. internet market. Optimum-parent Altice, meanwhile, also saw broadband net losses in its latest quarter, with MoffettNathanson analyst commenting at the time that the company faces “quite possibly an insurmountable leverage wall in 2027.”‘Terrible timing’ Charter’s stock is down about 20% since the company’s most recent earnings report, noted Bernstein analyst Laurent Yoon so, in that sense, the company’s possible interest in a deal seems like “terrible timing.” “But then again, these challenges, broadband growth in particular, and potential operating synergies to generate additional cash flows (eventually) may be the reason why they are assessing the potential merits of the transaction,” he continued. Yoon doesn’t see capital-expenditure synergies if the two companies were to combine, but he adds there could be “potential operating synergies in key markets where both CHTR and ATUS operate in contiguous markets with little to no overlap today.” Further, Charter potentially could refinance Altice’s $25 billion in debt at lower rates. But a transaction would potentially bring Charter’s own leverage ratio to 4.7 times, above its …nnDiscussion:nn” ai_name=”RocketNews AI: ” start_sentence=”Can I tell you more about this article?” text_input_placeholder=”Type ‘Yes'”]