The US’ fifth-largest cable provider Cablevision Systems could be the next acquisition target amid sector consolidation, according to analysts.
On Wednesday, Luxembourg telecoms group Altice announced its US$9.1bn agreement to acquire a 70% stake in…
The US’ fifth-largest cable provider Cablevision Systems could be the next acquisition target amid sector consolidation, according to analysts.
On Wednesday, Luxembourg telecoms group Altice announced its US$9.1bn agreement to acquire a 70% stake in number seven operator Suddenlink, prompting analysts to speculate that a Cablevision deal could soon be in store.
Pivotal Research raised its rating on Cablevision from ‘buy’ to ‘hold’ on the back of the Altice announcement, with analyst Jeffrey Wlodarczak saying the Altice deal and Cablevision’s increased keenness to sell make a deal more likely.
In his view, Altice may also go after New York-based Cablevision if Charter Communications, its reported rival for Time Warner Cable, ends up winning that contest.
“[W]e believe Altice has to do more deals and the sizeable cost cuts available at Cablevision will likely prove to be ultimately attractive for Altice,” he said.
Should Charter miss out on TWC, Wlodarczak said Charter, TWC and Altice may all vie for Cablevision.
“[I]n the unlikely event that Altice and TWC complete a deal, we would expect a Cablevision deal would be inevitable (although clearly pushed back) and there is a possibility that Charter would use that time to make a play for Cablevision,” he added.
Meanwhile, investment analysts at Barclays upped their target price on Cablevision shares from US$14 to US$15 each. The firm currently considers the cableco’s stock underweight.
Cablevision CEO James Dolan was cited saying at INTX in Chicago earlier this month that his company would welcome a merger and that consolidation in the New York market would fuel innovation, benefit consumers and lower prices.
Cablevision shares have also soared following the Altice announcement and subsequent speculation, rising 17% on the NYSE on Wednesday to close at US$24.69.
Cablevision offers cable television, broadband and voice services, primarily in the greater New York area.
