European Telecom Said to Be Weighing $200 Billion Bid for U.S. MSO

Aug 9, 2017  •  Post A Comment

A telecommunications conglomerate based in Europe is reportedly working up an offer to buy the No. 2 U.S. cable company. Reuters reports that Altice NV, based in the Netherlands, is in the early stages, along with its U.S. cable unit, of drafting a bid for Charter Communications.

Media reports suggest the offer is around $200 billion.

“The proposed plan highlights an expected wave of consolidation in the telecom industry as cable companies look for additional ways to cut costs and grow with more U.S. consumers cutting their cords,” Reuters reports. “It also illustrates the ambitions of Altice’s founder, Franco-Israeli billionaire Patrick Drahi, who made his fortune through debt-fuelled acquisitions swiftly followed by cost cutting to boost profits. A deal for Charter would be the clearest indication yet that Drahi hopes to replicate that model in the United States.”

Reuters adds: “Financing an acquisition of Charter or a merger of the company with Altice USA would be a major challenge for Drahi, whose net worth is pegged by Forbes at $14 billion. Even without a takeover premium, Charter is worth more than $180 billion including debt, while Altice NV and Altice USA have almost as much debt as their combined market capitalizations, of 32 billions euros and $23 billion, respectively.”

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