Montreal-based Cogeco Communications has restructured its operations, combining the “commercial, operational and technical” functions of its Canadian and Breezeline-branded U.S. telecommunications businesses into one North American unit. 

With the change, which was announced last week, Breezeline president Frank van der Post will depart. 

Among a series of other job shifts announced in the press release, Sean Brushett, VP of customer services and technical operations for Breezeline, will become chief operating officer of the combined North American group.

Chief financial officer Patrice Ouimet, chief technology officer Tim Dinesen, Linda Gillespie (chief human resources officer) and Caroline Paquet (president, Cogeco Media) will continue on in their current respective roles. 

“We identified a significant opportunity to increase our speed, drive new innovation and operate more efficiently,” Cogeco president and CEO Frédéric Perron said in a statement. "Against the backdrop of a rapidly changing industry, this nimbler structure will increase our agility and bring our top leaders closer to our customers and front-line teams.“

Cogeco acquired U.S. cable operator Atlantic Broadband for $1.36 billion in July 2012. It rebranded the operation as Breezeline in January 2022.

Cogeco expanded its North American footrprint in 2021, when Breezeline paid $1.125 billion for WideOpenWest's Ohio operations. 

Quincy, Mass.-based Breezeline ended March with 660,227 high-speed internet subscribers, having lost 4,951 broadband customers in the first quarter. 

The company just launched a mobile service last month. 

Cogeco-owned Breezeline said it is tapping into government funding for broadband deployment with plans to extend its fiber network into King William County, Virginia, next year to target 1,200-plus unserved homes and businesses

Breezeline is funding the expansion along with a $1.5-million subsidy from the Rural Digital Opportunity Fund, administered by the Federal Communications Commission. In a release quoting Breezeline VP of operations Sean Brushett, the company said it "completed the field walk out phase, the design phase is now underway, and we expect the construction phase to begin this fall.” The expansion is a multi-year initiative, it said.

Also: Biden Administration Doles Out BEAD Broadband Billions to States 

Breezeline said it's also expanding internet connectivity to about 7,500 unserved homes and businesses in eastern Caroline County and Essex County through a $15.2 million Virginia Telecommunication Initiative (VATI) grant, with additional contributions from Breezeline and the counties. The cable company said it finished construction earlier on a $7.2-million, 150-mile fiber-broadband expansion to more than 1,400 homes and businesses in Mathews, Caroline, Lancaster and Middlesex counties, also funded by VATI with contributions from Breezeline and the counties.

Two weeks after telling a Wall Street audience that rising valuations could help it pay down debt, WideOpenWest reached agreements to sell systems in five markets with a combined 324,000 broadband customers to Astound Broadband and Atlantic Broadband for $1.786 billion, a deal some analysts believe highlights the sometimes glaring gap between private and public market valuations for cable companies. 

WOW agreed on June 30 to sell systems in Chicago; Anne Arundel, Maryland; and Evansville, Indiana; to Astound Broadband for $661 million. At the same time, Atlantic Broadband agreed to buy the overbuilder’s systems in Cleveland and Columbus, Ohio for $1.125 billion.

WOW said it would use the proceeds to reduce leverage from its current 5 times forward-looking cash flow to 2.5 times, and fund ongoing expansion of its network through edge-out programs and greenfield construction. The deal is expected to close before the end of the year.

The deal comes after WOW chief financial officer John Rego said at the Credit Suisse Virtual Communication conference on June 15 that the company, if it wanted to pay down debt more quickly, could do so by “selling a market or two.”

The deal multiple works out to about 11 times cash flow, in line with recent private cable transactions that averaged between 12 and 15 times EBITDA. 

B. Riley Financial media analyst Daniel Day, who raised his 12-month price target on the stock to $30 per share after the deal, wrote in a research note that WOW was trading at about 8 times cash flow before the sale, further highlighting the disparity between public and private valuations. 

He wrote that the gap is even steeper on a broadband subscriber basis, where WOW’s $4,578 enterprise value per broadband customer is 60% less than its peer group.

“In our view, a 30% to 40% ‘overbuilder discount’ is more appropriate,” Day wrote, adding at that level, WOW’s share price would be $35.

The sale helped push WOW stock up more than 17% ($3.09 each) to $21.34 on June 30. The shares were trading at $21.61 each in afternoon trading on July 2. 

For Astound, which agreed in November to be purchased by Stonepeak Infrastructure Partners for $8.1 billion, the deal will significantly boost its presence in two of its top markets.

According to the deal, Astound will receive about 128,000 residential and business customers from WOW. The addition of the WOW systems will double Astound’s Chicago homes-passed to about 800,000 residences, while increasing its Washington, D.C. footprint (Anne Arundel is near Baltimore) by about one-third.

In Chicago, Astound competes against Comcast and AT&T, and in Washington, D.C., it goes up against Comcast and Verizon’s Fios. Astound CEO Jim Holanda said the added bulk will give it more of an advantage in what has already been a healthy competition. 

Big Boost in Chicago, D.C.

“I like to think we have been a strong competitor in both of those markets, certainly in the 11 years we’ve been operating RCN, and I would expect to continue to be a strong competitor against them in these two markets as we go forward,” Holanda said. Atlantic Broadband will receive about 196,000 internet, 61,000 video and 35,00 telephone customers in Cleveland and Columbus as part of the deal. In a press release, Cogeco Communications president and CEO Philippe Jetté said the deal will add “significant scale” to its U.S. business, raising its total internet customers by about 38%. In addition, the purchase will mean Montreal-based Cogeco will generate more than half of its revenue in the U.S.

Atlantic Broadband has traditionally stuck close to East Coast markets  so the WOW deal represents “a major step” in its strategy, ABB president Frank van der Post said in a press release. 

“The Ohio broadband systems’ geographic fit with our Pennsylvania operations, combined with our success in winning customer share in competitive markets and our experience integrating acquired properties, will ensure operational efficiencies, a seamless transition for customers, and strong growth in these markets,” van der Post said. 

Shortly after agreeing to purchase three WideOpenWest properties in the Midwest for about $661 million, Astound Broadband CEO Jim Holanda said the deal will double his company’s potential presence in the Chicago area, adding key neighborhoods in the city’s south side and western and northwestern suburbs, while growing its footprint in Washington, D.C by about one-third. 

Astound was one of two companies that agreed to buy five properties from WOW for a combined $1.786 billion. Atlantic Broadband agreed to purchase WOW’s Cleveland and Columbus Ohio systems, with about 196,000 customers, for $1.125  billion. The deal is expected to close in the second half of the year.

For Astound, the WOW deal is its first substantial purchase since agreeing to be bought by private equity company Stonepeak Infrastructure Partners for $8.1 billion. That deal, first unveiled in November 2020, is set to close shortly. In an interview, Holanda said the final government approval -- of the 259 that were required -- is expected from the California PUC in about four-to-six weeks.

“We’re looking forward to getting that last one done,” he said.  

Astound includes RCN, Grande Communications, enTouch Communications and Wave Broadband, and is the sixth largest cable company in the country, operating in eight states and Washington, DC. The WOW deal involves about 128,000 residential and business customers and passes a collective 700,000 homes. Also as part of the deal, Astound agreed to purchase WOW’s Evansville, Indiana operations, with which it has no adjacent systems. 

Also Read: Executive of the Year: True Patriot 

But it appears that the deal will have its biggest impact in Chicago. RCN has been offering service in Chicago since 1999, primarily in what is known as Area One (downtown, the north side along Lake Michigan and extending to the northern and northwestern suburbs). The Anne Arundel purchase will boost Astound’s presence in Washington D.C., where it has been operating since 1996, by about one-third. 

“Dating back maybe seven or eight years, we’ve had conversations with WOW’s management team about Chicago because we knew it would be a good fit,” Holanda said. “For whatever reasons they decided to formally put the process in place to explore potential sale opportunities for certain assets. Clearly the Chicago and Maryland cluster they put on the market was designed for our interest given the close proximity to our existing operations and networks. We’re very happy it all came to fruition over the past few weeks and months.” 

Holanda said the WOW systems are in good shape -- they are DOCSIS 3.1 compliant as are the rest of Astound’s properties -- and won’t require too much upgrade investment. While the penetration rates in those areas are lower than in some other WOW markets, the Astound chief sees it as a growth opportunity. 

“We think there is runway to continue to grow and take share over time,” Holanda said, adding that with the purchase Astound will pass about 800,000 homes in the market. In Washington D.C., the deal expands the footprint to 400,000 homes passed. 

In Chicago, Astound competes against Comcast and AT&T, and in Washington D.C., it goes up against Comcast and Verizon’s Fios. Holanda said the added bulk will give it an added advantage in what has already been a healthy competitive relationship. 

“I like to think we have been a strong competitor in both of those markets, certainly in the 11 years we’ve been operating RCN, and I would expect to continue to be a strong competitor against them in these two markets as we go forward,” Holanda said. “Competing against Comcast and Verizon and AT&T on a regular basis for the past decade, I think we’re always aggressive in trying to sign up customers onto our broadband platform. We’ll continue to do that with the WOW markets once we take ownership."

Astound has been an aggressive participant in the deal market. It was created after TPG bought RCN and Grande Communications in 2016 for $2.25 billion,  and the private equity player later added Wave Broadband in 2018 for $2.36 billion and enTouch Communications in September 2020. Under Stonepeak’s tutelage, Astound closed its purchase of small California fiber company Digital West about a month ago.  

Holanda said that the WOW purchase is no harbinger of a buying binge anytime soon, adding that the company regularly looks at deals as well as organic growth opportunities. 

“Clearly with a new long-term infrastructure equity investor like Stonepeak, being able to do accretive M&A has always been something that we have done,” Holanda said.  “And whether that was with ABRY our original owner, whether it’s been with TPG when we bought Wave [Broadband] and enTouch and now with Stonepeak going after WOW, we’re continuously looking at those opportunities that are on the market and try to create opportunities where we  have contiguous cable properties, that are of interest to us. I think we will obviously continue to do that with Stonepeak. But we are also pretty disciplined when it comes to M&A and we need to make sure that it's going to be accretive and operationally we can take on that challenge on behalf of customers.” 

Other operators have been looking at smaller deals as consolidation has limited the number of players available. In the past 12months, Altice USA, which gave up on its $8.1 billion attempt (with Rogers Communications) to take over Atlantic Broadband parent Cogeco Communications in November, has closed deals for tiny Service Electric Cable TV. of New Jersey for $150 million and North Carolina broadband provider Morris Broadband for about $310 million. 

Holanda added there appears to be more smaller operators willing to do deals than in the past.

“At any given time we have a handful of opportunities that we are evaluating,” Holanda said. “That’s been pretty consistent over the last couple of years. If you think about how cable valuations have expanded over these last four or five years, I do see smaller deals like enTouch and Digital West -- just a couple of thousand homes outside of our Seattle market. We’ll continue to look for tuck-in acquisitions that are contiguous to our existing operations and we think we can provide a long-term investment platform to upgrade and/or integrate into our ecosystem.”

Altice USA, just days after euthanizing its $8.4 billion bid for Canadian telecom company Cogeco, said it would repurchase about $2.5 billion of its shares, a move that boosted its stock by more than 8% in early trading Monday.

Altice USA shares were up about 8.4% ($2.73 each) to $34.99 per share  in early trading Nov. 23, primarily because of the buyback plans. Analysts and investors have been looking for Altice USA to increase its share repurchase program after it pulled the plug on its bid to buy Cogeco Communications earlier this month. 

Altice USA launched the Cogeco bid, with Canadian telecom giant Rogers Communications, on Sept. 2 for $7.8 billion ($3.4 billion for Cogeco’s U.S. cable company, Atlantic Broadband). After being rejected by Cogeco’s controlling shareholder and increasing its offer in October to $8.4 billion, which was also rejected, Altice USA formally gave up on the pursuit on Nov. 18. 

According to a press release, Altice USA said it has commenced a Dutch auction tender offer to repurchase $2.5  billion of its shares, at a price not to exceed $36, nor less than $32.25 each. Altice USA’s share price as of Nov. 20 was $32.27 each. The offer will be open until Dec. 21 and is contingent on the completion of its sale of 49% of its Lightpath telecom unit to Morgan Stanley Infrastructure Partners, which recently received regulatory approval. 

Altice USA also raised its share repurchase target for 2020 to $5 billion from $2.5 billion previously. The company said it repurchased about $660 million of its shares between Oct. 1 and Nov. 20, putting its year-to-date buybacks at about $2.5 billion.  

In a research note, Bernstein media analyst Peter Supino said the buybacks were expected, but was surprised at the timing and the amount. 

“This offer seems to indicate the strength of the underlying business and the public LBO strategy of the company,” Supino wrote. “While we anticipated that the Lightpath deal would potentially result in an increased capital return to shareholders, we did not expect the timing or magnitude of the transaction.”

The offer price of the buyback represents a 12% premium to Altice USA’s closing price on Nov. 20, and will result in a 12.8% to 14.3% reduction of outstanding shares. According to Supino, Altice has bought back about $5 billion of its stock at an average price of $24 each since 2018. 

Altice USA officially threw in the towel in its months-long pursuit of Cogeco Communications, saying Wednesday that it will not pursue its bid for the Canadian telecom company.

Altice USA joined with Canadian telecom giant Rogers Communications on Sept. 2 to launch a $7.8 billion bid for Cogeco.  As part of the deal, Altice would pay about $3.6 billion for Cogeco’s U.S. cable assets (Atlantic Broadband) while Rogers would pay $4.2 billion for Cogeco’s Canadian telecom businesses. That offer was rejected by Cogeco’s controlling shareholder -- Gestion Audem -- but Altice sweetened its bid on Oct. 19, increasing its price for Atlantic Broadband to $3.9 billion. While that bid was also rejected, Altice said it would give the company until Nov. 18 to officially answer. 

Related: Altice and Cogeco: He’s Just Not That Into You 

Altice USA had held out little hope of a deal materializing after the second rejection, but kept its fingers crossed. But with no deal in sight, on Nov. 18, Altice USA officially called off its pursuit. 

“Our offer to acquire Cogeco in order to own Atlantic Broadband has expired and we do not intend to extend it,” Altice USA said in a statement. “We remain committed to our growth strategy and continue to focus on opportunities to drive value for our shareholders.”

That includes continuing to look at both organic and M&A opportunities to grow the footprint. 

Earlier on Wednesday, Rogers CEO Joe Natale said at an industry conference that he was disappointed that he never got to negotiate with Gestion Audem’s ruling Audet family. He added that he still believes the deal would have been good for both companies.

“We’re disappointed that we didn’t get the ability to engage with either the Audet family or the Cogeco boards on what is a terrific offer, a highly valued offer,” Rogers CEO Joe Natale said at the RBC Capital Markets Global Technology, Internet, Media and Telecommunications Virtual Conference. “But it just wasn’t meant to be, there wasn’t the appetite to follow through or pursue it on their part.” 

With its $3.9 billion pursuit of Atlantic Broadband nearly just a memory, Altice USA is turning its focus to smaller acquisitions, telling analysts it has a “handful” of potential targets in mind as it looks to boost growth. 

Altice USA launched a $3.6 billion offer for Atlantic Broadband — part of a larger $7.8 billion joint bid with Rogers Communications for its parent, Canadian telecom operator Cogeco — on Sept. 2. After Cogeco’s controlling shareholder rejected that deal, Altice and Rogers increased their offer to $8.4 billion ($3.9 billion for ABB) on Oct.18, which was again summarily rejected.

On its Oct. 29 conference call with analysts to discuss third-quarter results, Altice USA CEO Dexter Goei noted that there is still time for Cogeco to change its mind — it had imposed a Nov. 18 deadline for Cogeco to accept the deal — but he held out little hope. 

“We’re very cognizant that the controlling shareholder needs to be acquiesced,” Goei said on the conference call. “Based on his rhetoric and his statements to date, I think it’s fair to say that there is a low chance of us collectively with Rogers being able to move forward on this project. Formally, we’ve got until Nov. 18, so we’ll see if anything shakes loose.” 

The apparent failure of the Cogeco bid doesn’t mean Altice USA is giving up on M&A. On the conference call, Goei pointed to a handful of potential targets, adding that interest is growing among small operators to sell out. 

“We are out there looking at a handful of things,” Goei said, adding that given Altice USA’s 21-state footprint, there are several opportunities to find small systems contiguous to its operating area.

Small-Market Opportunities 

While the choices may be few and far between in Altice’s Optimum footprint — the former Cablevision Systems operations in New York, New Jersey and Connecticut — the opportunities appear greater in its Suddenlink division. Suddenlink, which Altice purchased in 2015 for $9.1 billion, operates in 14 states and has been a “sneaky” source of organic growth for the company, according to Bernstein media analyst Peter Supino. 

In a research report, Supino estimated Altice would add about 90,000 broadband customers in 2021, 85,000 in 2022 and 70,000 in both 2023 and 2024, with the bulk of those gains (66,000; 67,000; 69,000 and 71,000) coming from Suddenlink. 

“Why would a decades-old business in smaller midwestern and southeastern cities offer a growth opportunity?” Supino asked in his report. “Amidst steadily rising demand for bandwidth — a powerful trend long before COVID-19 — and with relentless cable upgrades overwhelming DSL [digital subscriber line] competition, small-town cable has become a quasi-monopoly on Internet service.” 

Altice USA already showed its appetite for smaller systems when it purchased Service Electric Cable TV of New Jersey in July for $150 million. In its Q3 conference call, Goei said Service Electric has proven to be a strong purchase, adding that Altice has been able to grow the unit with minimal eff ort. Service Electric has about 30,000 subscribers. 

“It’s not necessarily that easy to unlock all of this, but given the environment, given the interest rate environment, given that size does really matter here in terms of getting operational synergies and investing heavily in technology and customer service, it is starting to percolate that some of the smaller operators, the mom-and-pop guys, are looking to deal,” Goei said. 

He pointed to Service Electric, which needed some investment in its network and didn’t have a consistent marketing strategy when Altice first bought it, but has responded well with minimal effort. 

“We’re seeing a lot of low-hanging fruit just by adding two or three additional salespeople both on the SMB [small and medium-sized businesses] side and the B2B side, that’s been very lucrative for us just increasing penetration out there, bringing new products, and we’re upgrading the network as quickly as we can,” Goei said. “Everything that we are able to get our hands on in terms of M&A opportunities will be the best use of our capital.” 

Altice also has the financial wherewithal to do a deal. In addition to generating a ton of free cash flow — $458 million in Q3, 48% above consensus and three times the prior year figure — the cable operator is expected to receive about $1.1 billion in cash from the sale of a 49% interest in its LightPath business telecom unit to Morgan Stanley Infrastructure Partners. That deal is expected to close in the fourth quarter. 

Little Guys Seek Deals 

According to sources in the cable M&A community, smaller operators are indeed looking to do deals. In addition, TPG, the Dallas-based private equity firm that owns RCN, Grande Communications, EnTouch Communications and Wave Broadband, agreed to sell its systems with more than one million customers to private equity group Stonepeak Infrastructure Partners and Patriot Media in a deal valued at about $8.1 billion, including the assumption of debt. 

TPG, which put the assets on the block in September, purchased the systems in three separate deals, agreeing to pay $2.25 billion for RCN and Grande in 2016, and completing its $2.36 billion purchase of Wave in 2018. It purchased Entouch in September, adding 22,000 customers. 

While most of the attention is heaped on large, publicly traded cable operators, the industry is still peppered with small, family-owned operations that dot the country. According to Kagan, a unit of S&P Global Market Intelligence, there are more than 700 cable operators across the country with less than 100,000 subscribers, with a number of those companies located in states where Suddenlink operates, like Kansas (29), Kentucky (28) and Texas (23). 

One small operator that asked not to be named added that the number of companies willing to do deals isn’t necessarily increasing, it’s just that as other growth opportunities fade, they are becoming better noticed. 

“To some extent, I think those deals in the smaller operator space have always existed,” the operator said. “I don’t think we have seen any particular uptick.” 

According to analysts, while Altice USA’s growth strategy includes edging out its current footprint and driving penetration rates in its existing territory, it is a bit hamstrung by its popularity in its bigger markets. Penetration rates in its Optimum service footprint — basically metropolitan New York — are more than 50%. While opportunities are greater in its more rural Suddenlink markets, with penetration rates of 30% to 40%, buying systems still appears to be the fastest way for Altice to achieve its goals. 

In a research note, MoffettNathanson principal and senior analyst Craig Moffett acknowledged Altice’s M&A desires, adding that a combined strategy of organic growth and M&A deals are what will most likely drive the stock in the future.

Growth Strategy 

“Altice clearly wants to grow, not only through acquisition, but also by edging out into unserved adjacent rural markets,” Moffett wrote. “And that’s precisely what the market wants.” 

Barclays Research media analyst Kannan Venkateshwar agreed, adding that while Altice does have some strong growth drivers, its high penetration rates and industry-high ARPU (average revenue per user) limit visibility in the long term. 

“Consequently, we do believe [Altice USA] is likely to more actively seek smaller cable deals over the course of the next year, to extract growth from synergies instead,” he wrote. 

After an impressive 66% run in 2019, Altice USA shares have slid about 3% this year. A lot of the pressure on the stock is due to investor concerns that its nearly fully penetrated in the competitive New York market. 

“Anything that Altice can do to geographically diversify away from their legacy Optimum footprint would be welcomed by the market, even if they have to pay a premium to do it,” Moffett wrote.

Altice had strong Q3 results — broadband growth at 26,000 subscribers was above consensus expectations — in line with other larger operators. Altice USA also managed to convert a large chunk of broadband subscribers that were receiving service as part of the Keep America Connected pledge, where most providers agreed not to disconnect broadband service during the pandemic. Altice said that during the second quarter about 10,000 customers under the KAC pledge were past due on payments for more than 90 days. Now that number of delinquent accounts is under 3,000, the company said. 

Broadband Boom 

Altice USA’s broadband growth comes as larger companies continue to rack up high-speed internet subscribers. The country’s largest cable operator, Comcast, added 633,000 broadband customers in Q3, its best quarter for broadband growth ever. No. 2 Charter Communications added 537,000 broadband customers in Q3, and has gained more than 1.4 million broadband customers in the past 12 months. 

On a conference call with analysts, Comcast chairman and CEO Brian Roberts marveled at the continued momentum for the broadband product, which most cable operators began offering in earnest at the turn of the 21st century. 

“To have the best broadband quarter in the company’s history sitting here in 2020, when it’s a 20-year-old product, give or take, is a pretty dramatic and amazing statement in my opinion,” Roberts said on the call. 

Broadband growth has been robust to say the least during the pandemic. According to Moffett, high-speed internet growth rates at Charter have been between 6.1% and 8.8% for the past three quarters, while Comcast has ranged between 5.5% and 6.7% growth. Altice, which has a much smaller and more highly penetrated customer base, grew between 2% and 3.7% over the past three quarters. 

While Altice, like its larger peers, is building out its footprint to include homes previously not receiving service, that won’t likely be enough on its own to move the growth needle. Altice said it is extending its network to about 150,000 new homes per year. Charter is building out between 500,00 and 600,000 homes and Comcast is doing about the same. In a conference call with analysts Oct. 30, Charter chief financial officer Christopher Winfrey said while the effect of the build outs has had a “meaningful” impact on broadband subscriber growth, it hasn’t been “material.” 

“It’s helpful, but it’s not the material driver for our growth,” Winfrey said. That would mean for companies like Altice, acquisition — any acquisitions — may be the only way to turn the corner on growth fast enough to satisfy Wall Street. 

“To be sure, waking up to news that Altice has bought a small operator many people won’t have ever heard of before isn’t as sexy as waking up to news that they’ve been bought by Charter would be,” Moffett wrote. “But it is infinitely more likely, and Altice shares are cheap enough that buying a small operator or two might be all that is needed to finally close the valuation gap.”

While Altice USA CEO Dexter Goei is still holding out hope that its latest offer to buy Canadian cable operator Cogeco will be accepted, he is cognizant that right now, the odds don’t look so good.

Altice USA made its first offer for Cogeco on Sept. 2, a $7.8 billion joint offer with Canadian telecom giant Rogers Communications. Altice would buy Cogeco’s U.S. operations -- Atlantic Broadband -- for $3.6 billion, while Rogers would snap up its Canadian businesses for $4.2 billion. That offer was quickly rejected by Gestion Audem, the holding company for Cogeco’s founding Audet family’s controlling interest in the company. In rejecting that offer, Cogeco executive chairman Louis Audet, also the controlling member of Gestion Audem, said the family had no intention of selling its interest, adding that its stance was “not a negotiating tactic.” 

That didn’t stop Altice from sweetening its offer by about $600 million to $8.4 billion -- $3.9 million for Atlantic Broadband -- on Oct. 18,   adding that the company had until Nov. 18 to accept the bid. Gestion Audem wasted little time to reject the new offer, adding that same day that “Since this is apparently not registering with Rogers and Altice, we repeat today that this is not a negotiating strategy, but a definitive refusal.”

Goei, during a conference call with analysts to discuss Q3 results on Thursday, admitted that it looks like a Cogeco deal won’t materialize, but he wasn’t folding all of his cards just yet.

“We’re very cognizant that the controlling shareholder needs to be acquiesced,” Goei said on the conference call. “Based on his rhetoric and his statements to date, I think it's fair to say that there is a low chance of us collectively with Rogers being able to move forward on this project. Formally we’ve got until Nov. 18, so we’ll see if anything shakes out.”

Although it seems unlikely that Atlantic Broadband will be joining the Altice fold anytime soon, Goei said he was encouraged by the M&A opportunities that exist in the U.S. market, particularly with smaller operators. He pointed to Altice’s July purchase of Service Electric Cable TV of New Jersey, which he said has grown since the purchase with little extra effort.

“We are out there looking at a handful of things,” Goei said, adding that given Altice USA’s 21-state footprint, there are several opportunities to find small systems contiguous to its operating area. 

“It’s not necessarily that easy to unlock all of this, but given the environment, given the interest rate environment, given that size does really matter here in terms of getting operational synergies and investing heavily in technology and customer service, it is starting to percolate that some of the smaller operators, the Mom and Pop guys, are looking to deal,” Goei said.

He pointed to Service Electric, which needed some investment in its network and didn’t have a consistent marketing strategy when Altice first bought it, and has responded well with minimal effort. 

“We’re seeing a lot of low hanging fruit just by adding two or three additional sales people both on the SMB side and the B2B side that’s been very lucrative for us just increasing penetration out there, bringing new products and we’re upgrading the network as quickly as we can,” Goei said. “Everything that we are able to get our hands on in terms of M&A opportunities will be the best use of our capital.”

Altice USA expects about $1.1 billion in proceeds from its sale of a 49% interest in its Lightpath division to Morgan Stanley Infrastructure Partners. While that money could be used to help finance system purchases, Goei added that if no M&A opportunities are found, the next best use for that cash could be share repurchases.

After spurning Altice USA’s advances twice, Canadian telecom company Cogeco doubled down on the cable business on Wednesday, with its Cogeco Connexion subsidiary agreeing to buy Quebec operator DERYtelecom for C$405 million. 

DERYtelecom is the third largest cable operator in Quebec, offering internet, television and telephone service to about 100,000 customers across the province. According to Cogeco, DERYtelecom reported revenue of about C$105 million and adjusted EBITDA of C$44 million for the fiscal year ended Aug. 31. 

The news comes shortly after Cogeco rejected a sweetened $8.4 billion buyout offer from American cable company Altice USA and Canadian telecom giant Rogers Communications. Altice has said it would buy Cogeco’s U.S. cable assets -- Atlantic Broadband -- for $3.9 billion, while Rogers would pay about the same for Cogeco’s Canadian operations. Cogeco’s controlling shareholder, Gestion Audem, rejected the latest offer, as it had rebuffed the earlier bid of $7.8 billion for the company.    

Related: Altice USA and Cogeco: He’s Just Not That Into You 

In a press release, Cogeco said the deal made sense because DERYtelecom’s operations are similar to its own, and presents an opportunity to use its sales and product expertise to bolster DERYtelecom’s service offerings. Cogeco estimated the deal would present about $3 million in annual run-rate synergies, and will help it expand its rural reach.   

“The acquisition of DERYtelecom is a strong strategic fit which will allow Cogeco Connexion to increase its presence in areas that are adjacent to its Quebec footprint and to build on the long history of mutual respect, collaboration and friendship between the two companies,” said Cogeco CEO Philippe Jetté in a press release. “Our proven track-record in the successful integration of regional cable businesses, having acquired five companies in the U.S. and Canada over the past five years alone, demonstrates our commitment to bring superior connectivity to regional and rural communities.”

The transaction represents an acquisition multiple of 7.8 times EBITDA, accounting for the projected synergies and tax benefits.

The purchase price will be financed with a combination of cash on hand and Cogeco’s term revolving facility. The transaction is subject to regulatory approvals under the Competition Act along with other customary closing conditions and is expected to close in the second quarter of fiscal 2021.

Altice USA showed up at Cogeco’s door over the weekend, bearing a sweetened offer that was soundly rejected for a second time by the Canadian telco’s controlling shareholders. And while Gestion Audem, the family trust that controls 69% of Cogeco’s vote, effectively swatted away Altice’s offer of more candy and bigger flowers, there are those that believe that the latest bid may not have been aimed at them after all. 

Gestion Audem, the trust headed by the telco’s executive chairman Louis Audet, wasted little time in firing off a rejection of the latest Altice USA bid for the company, which at $8.4 billion  represented an 8% increase to its Sept. 2 offer. In a tersely worded statement, Luis Audet basically asked Altice USA what part of “No,” does it not understand?

Audet referenced Gestion Audem’s earlier rejection of Altice USA’s offer in its statement, adding: "Since this is apparently not registering with Rogers and Altice, we repeat today that this is not a negotiating strategy, but a definitive refusal. We are not interested in selling our shares."

That’s a pretty clear “We’re not that into you,” from an entity that pretty much calls the shots for Cogeco and its subsidiary Cogeo Communications. But some analysts believe that the raised offer wasn’t for the family -- although it did include a little sweetener for them -- but for minority shareholders that seem to be more receptive to a deal.

“Under the circumstances, Audet's decisive rejection of Altice's bid could not have come as a surprise,” wrote Bernstein media analyst Peter Supino in a note to clients Monday. “In that light, we assume that Altice has aimed this second offer at Cogeco's minority shareholders. The deal's valuation of Atlantic –11x forward EBITDA – certainly merits their attention.”

Minority shareholders appear to be open to a transaction. Altice USA CEO Dexter Goei said at the virtual Goldman Sachs Communacopia conference in September that it has received “supportive feedback” from some Cogeco shareholders. 

Supino, in an e-mail message, added that shareholder interest has been high in the deal.

“Our sense is that there is significant minority investor support for Altice’s proposal,” Supino said. “Whether the Audets will place a value on that, we don’t know.”

But just what could Cogeco’s minority shareholders do? Like their American counterparts, they could take their case to court, but the chances of that being successful are low. 

Robert Yalden, Stephen Sigurdson Professor in Corporate Law and Finance Faculty of Law, at Queen’s University in Kingston, Ontario, said while class action suits are not the norm around takeover bids in Canada, shareholders could sue under the “Oppression Remedy,” which allows any shareholder to take action if they feel the company has wronged them. But there are two very big hurdles in using the Oppression Remedy to try to force a controlling shareholder to sell: Canadian law requires company boards to act in the best interests of the company, not its shareholders; and it’s hard to prove you’re being oppressed just because a larger shareholder doesn’t want to sell. 

Yalden added that Canadian courts, like U.S. courts, usually give public companies the benefit of the doubt, assuming that a company’s board of directors made decisions on an informed basis and with the best interests of the company in mind, the so-called “business judgment rule.” So shareholders would have to make an extremely compelling case that the board has done something wrong.  

“Even if you made that case, I’m not sure where it would get you because what you’re trying to do is force a majority shareholder to sell,” Yalden said. “I think it would be very unlikely that a court would say the majority shareholder, by refusing to sell its shares, is acting improperly. I think it’s an uphill battle. That doesn’t mean they won’t try something, but it’s not obvious to me.”

While court action may be a long shot, it may not even be necessary. Most of the shareholder pressure to do a deal seems to be centered on the Altice portion of the transaction. 

In a research report Monday, Barclays research media analyst Kannan Venkateshwar noted that there is a big disparity in the multiples being offered for Cogeco’s Canadian and U.S. assets. According to the deal parameters, Rogers is offering about 8.5-to-9 times cash flow for Cogeco’s Canadian businesses, about in line with other past telecom deals. Altice USA’s bid for Atlantic Broadband is valued at more than 11 times cash flow, at the upper end of past U.S. media deals.   . 

Venkateshwar wrote that  the disparity between those multiples could eventually force the Audets to sell Atlantic Broadband and keep its Canadian holdings. The $3.9 billion in Altice cash could go a long way toward shoring up its balance sheet and competing more effectively with the larger Rogers. 

Earlier this year Cogeco unveiled plans to enter the wireless business, long a stronghold of Rogers, the most dominant mobile player in Canada. Cogeco executives have speculated that Rogers’ motivation to do a deal could be more about eliminating a competitor than expanding its reach. 

At the virtual BMO Capital Markets Media & Communications conference Sept. 15, Cogeco chief financial officer Patrice Ouimet said the company was not surprised by the Rogers and Altice USA bids, but was taken aback by how they did it.

“...Proceeding with a hostile offer on a family-owned company was something that was surprising to us,” Ouimet said. “Not the interest, but the way it was done, especially since the Audet family had indicated the night before that they would not sell in the transaction.”

He also was puzzled about the timing of the bid and speculated it could be connected to Cogeco’s plans to launch a wireless service. Cogeco submitted a plan to offer a Hybrid Mobile Network Operator (HMNO) wireless service, using its own spectrum and leasing network space from other carriers, to the Canadian Radio-television and Telecommunications Commission in February. That proposal is still awaiting approval from the regulatory agency. 

“Taking Cogeco out of the equation for Rogers is probably part of the equation to launch a hostile bid right now,” Ouimet said at the conference. 

In his report Venkateshwar wrote that buying Cogeco could “potentially smooth out the competitive environment for Rogers, particularly given its wireless market share in Ontario and Quebec (~47% and ~28% subscriber share, respectively).”

But it also could force Rogers to make a decision regarding its existing Cogeco investment. If the Audet family continues to fend off its advances, Rogers may just decide to sell its stake and focus on other things.

“Given the tightly held family ownership structures of Rogers and Cogeco, any transaction is ultimately subject to idiosyncratic choices made by a small set of individuals rather than the underlying economic or strategic rationale of the proposed deal,” he wrote.

Altice seems to get it, adding in the press release for its revised offer that it would withdraw the bid if it doesn't have a "mutually satisfactory" agreement or "at least a clear path forward to completion of a transaction," by Nov. 18. That gives both sides plenty of time to decide just how much they're into each other. 

Altice USA, more than one month after its unsolicited bid for Cogeco Communications was soundly rejected by the Canadian telco’s controlling shareholder, has increased its bid by 8%, including upping its offer for Cogeco’s US operations, Atlantic Broadband.

In a statement, the Audet family, which controls about 69% of Cogeco's vote, again rejected the deal. 

Altice USA said on Sunday that along with Canadian telecom giant Rogers Communications, it was raising its offer for 100% of Cogeco to C$11.1 billion ($8.4 billion) in cash. Altice USA said if the offer was accepted, it would pay about C$5.1 billion ($3.9 billion) for the Atlantic Broadband assets and sell Cogeco’s Canadian businesses to Rogers for the remainder. 

Altice and Rogers offered a combined $7.8 billion for Cogeco on Sept. 2. Of that amount, Altice said it would pay about $3.6 billion for Atlantic Broadband.

Cogeco’s ruling Audet family rejected Altice and Rogers’ earlier bid in September, adding that the family had no intention to sell its stake. 

At the time Louis Audet, Cogeco executive chairman and leader of the Audet Family Trust, Gestion Audem, said in a statement that the family’s rejection of the bid “not a negotiating tactic.”

In a statement issued late Sunday, the family held fast to that stance.

"As we did on September 2nd, 2020, following the announcement of their first unsolicited proposal, members of the Audet family unanimously reject this further proposal. Since this is apparently not registering with Rogers and Altice, we repeat today that this is not a negotiating strategy, but a definitive refusal. We are not interested in selling our shares," said Louis Audet in the statement.

He added that the Audet family's stewardship of the company over 63 years has allowed Cogeco to grow into the only broadband provider with significant operations in the U.S. and Canada, and its stock price and operating results have outperformed  both Altice USA and Rogers.

"Rogers has freely chosen to accumulate shares in the Corporations with full knowledge of the implications," Louis Audet continued. "The Audet family regrets that Rogers' capital allocation decision is causing the Rogers family and Board such anguish."

A good chunk of the bid increase is targeted at the Audet family, led by Cogeco chairman Louis Audet. Altice said that about C$900 million ($682 million) of the purchase price would go to the family for their shares, up from the C$800 million ($612 million) they would have received in the earlier offer.

“We are pleased to present an incredibly attractive revised and enhanced offer for Cogeco that significantly rewards all shareholders and incorporates feedback from recent discussions with holders of subordinate voting shares,” Altice USA CEO Dexter Goei said in a press release. “We encourage the Cogeco boards to act in the best interest of all shareholders and stakeholders as they thoughtfully consider this offer, and we respectfully request that the boards engage with us to discuss our proposal.”

Most analysts expected Altice to increase its bid. 

Altice said in a press release that it was giving Cogeco until Nov. 18 to accept the offer, after such time it would withdraw the bid.

Altice USA stock was up as much as 4.7% in early trading Monday after Sanford Bernstein media analyst Peter Supino upgraded the stock to “outperform,” adding that the shares are woefully undervalued and pointing to potential catalysts in its mid-sized Suddenlink Communications markets.    

Altice USA shares rose as high as $27.27 each, up $1.22 or 4.7%, in early morning trading. The stock was priced at $26.57 each (up 52 cents each or 2%) at 12:05 p.m. on Oct. 5. 

Supino wrote that Altice USA has suffered from sluggish growth in the past, but he believes the underlying fundamentals bottomed out earlier this year. With capital spending associated with its fiber buildout expected to decline as the company nears completion, and the sale of 49% of its Lightpath commercial telecom subsidiary expected to inject about $1.1 billion in cash to the company in Q4, Altice USA will be able to invest more in the business.

Altice USA made an unsolicited offer to purchase Canadian telco Cogeco with Rogers Communications last month, a deal that was soundly rejected by the target’s ruling Audet family. Altice would have purchased Cogeco’s U.S. cable assets -- Atlantic Broadband -- for $3.6 billion while Rogers would acquire its Canadian assets for $4.2 billion. While some analysts had expected Altice and Rogers to increase their offer, so far, the deal appears dead in the water. 

In the meantime, Supino believes that Altice USA should benefit from continuing to expand its homes passed, upgrading under-penetrated Suddenlink passings, modifying its MVNO agreement with T-Mobile and fiber upgrades to existing customers.

“Altice is a cheap stock of a solid business led by a highly incentivized management team,” Supino wrote. He pointed to the stock's low trading multiple (8.4 times cash flow) compared to peers like Charter Communications (11.6 times) Comcast (9.1 times) and Cable One (16.8 times). 

While most investors focus on Altice USA’s New York area markets (sold under the Optimum brand), Supino said its Suddenlink markets could be the “sneaky secular growth driver” for the company.

“Amidst steadily rising demand for bandwidth – a powerful trend long before COVID19 – and with relentless cable upgrades overwhelming DSL competition, small town cable has become a quasi-monopoly on Internet service,” Supino wrote. He added that despite lower purchasing power and dispersed service territories, the rising demand for broadband in rural markets and Suddenlink’s low service penetration rates creates a long-term growth opportunity.

Supino said another opportunity lies in the completion of its fiber buildout, which is expected by the end of 2023. 

“Assuming the project will be completed by year end 2023, 2024 capex should decline by over $300 million year-over-year to our $1 billion forecast, or 9% of revenue,” Supino wrote. “While this percentage may seem hopeful to experienced cable analysts, we point out that Altice's capex minus fiber investment benefits from best-in-class population density and penetration levels. ”

Altice USA’s and Rogers Communications’ unsolicited offer for Cogeco reached a new level Wednesday after Cogeco's lead independent director fired off a letter to the companies, claiming they are confusing investors by continuing to pursue the bid.

Altice USA and Rogers launched a $7.8 billion offer for Cogeco on Sept. 2. As part of that offer, Altice USA would purchase Cogeco’s U.S. assets -- Atlantic Broadband -- for about $3.6 billion, while Rogers would acquire the company’s Canadian businesses for $4.2 billion. Cogeco’s controlling shareholder -- the Audet family -- promptly rejected the deal, stating that its refusal to sell was not a negotiating tactic.

While Altice USA and Rogers have said they are hopeful a deal could be reached, Cogeco has been adamant in its rejection of the deal.

Altice USA and Rogers fired off a letter to Cogeco’s executive chairman and lead representative of the Audet family Louis Audet on Sept. 15, pointing out that its offer was rejected without the directors or independent directors “undertaking any appropriate process.”

Related: Cogeco CFO Says Wireless Competition May Be Driving Hostile Bid 

Altice USA and Rogers continued that no independent committee was created to look at the offer, nor was the offer referred to Cogeco’s Strategic Opportunities Committee.

“These failures of the boards resulted in there being no comprehensive review and analysis of our offer or deep engagement with the controlling shareholder,” Goei and Natale wrote. “In simple terms, the boards and their independent directors failed to fulfill their most basic duties in representing the shareholders they are duty bound to represent and protect.”

Related: Altice USA Tries to Keep Cogeco Bid Alive 

Goei and Natale asked to meet with Cogeco lead independent director James Cherry later this week to “to better understand the rationale of the boards and independent directors behaving in this manner.” They asked to hear from the board by 5 p.m. Sept. 16 as to whether such a meeting was possible. 

Cherry met that deadline, stating in a letter Wednesday that the allegations made by Altice USA and Rogers were untrue and unsubstantiated.

“From the outset, you have engaged in bad faith tactics, some of which created confusion in the market,” Cherry wrote, adding that shortly after making its initial offer to Cogeco on Sept. 1 and offering to respond to questions, Altice and Rogers made their bid public. That action, Cherry continued, didn’t give Cogeco any time to respond and neglected to mention that the Audets had rejected the proposal the night before. 

“We can only surmise that this was done with a view to misleading investors and increasing the stock price in an attempt to put pressure on the family to sell,” Cherry wrote, adding that its process was proper. “We will not engage in a futile exercise aimed at diverting the attention of management and key resources from our business operations while creating friction among our stakeholders.”

Altice USA CEO Dexter Goei said he has received “very supportive” feedback from Cogeco shareholders since his company paired with Rogers Communications to launch an unsolicited bid for the Canadian telecom company. And though he said he is still pursuing a deal despite a rejection from Cogeco’s controlling shareholder, he stopped short of saying he would increase his offer.

Altice and Rogers launched their $7.8 billion bid for Cogeco on Sept. 2 and almost immediately were rebuffed by Cogeco’s ruling Audet family, which said it had no intention to sell. While some have speculated that Altice will likely raise its offer to keep the deal alive, the Audet’s have insisted their rejection was not a negotiating tactic. 

At the Goldman Sachs Communacopia conference on Tuesday, Goei wouldn’t say whether Altice USA plans to increase its bid. But he said he has received a lot of positive feedback from shareholders outside of the Audet family. 

“We remain committed to the process and we  look forward to hearing back at some point from the board,”  Goei said at the conference. “We’ve gotten, as you may suspect, very supportive feedback from shareholders of the target who would like to see us engaged in a process. I think there's just a question of time in terms of if we are able to engage here and what form it would take.”

Altice USA still sees M&A as the most effective path to growth, adding that the company has had success in squeezing more revenue and profit out of small assets.

“We’ve never shied away [from the idea] that M&A is the best return for our shareholders,” Goei said, adding that while Atlantic Broadband is well run, he believes Altice USA can make it even more profitable. 

“We think we can do a better job going forward, not only on the cost side of the business,” Goei continued. “Each of the businesses we’ve acquired -- at Cablevision and at Suddenlink -- we’ve been able to accelerate top line growth, whether it’s in the existing footprint in cable, but also the ancillary businesses whether it be B2B, advertising or mobile.  We feel good about our opportunities about taking smaller businesses in cable and driving great integration and top line growth.”

Cogeco chief financial officer Patrice Ouimet said the motivation for Rogers Communications’ hostile bid for his company may be primarily driven by the larger telecom firm’s desire to keep Cogeco out of the wireless business.

Rogers, along with Altice USA, launched an unsolicited $7.8 billion bid for Cogeco on Sept. 2. The deal was split into two parts -- Rogers would pay $4.2 billion for Cogeco’s Canadian telecom assets while Altice USA would put up $3.6 billion for Cogeco’s U.S. cable business, Atlantic Broadband. Cogeco’s controlling shareholder -- the Audet family -- rejected the deal, saying in a statement last week that its rejection was not a negotiating tactic, but was indeed final. 

At the BMO Capital Markets Media & Communications conference Tuesday, Ouimet said the company was not surprised by the Rogers and Altice USA bids, but was taken aback by how they did it.

“The interest in our company is not that surprising,” Ouimet said. “We have attractive assets in both countries and we have had strong performance as well -- we’ve performed very well in the past two or three years. Proceeding with a hostile offer on a family-owned company was something that was surprising to us. Not the interest, but the way it was done, especially since the Audet family had indicated the night before that they would not sell in the transaction.”

Ouimet also was puzzled concerning the timing of the bid, speculating that it may be tied to Cogeco’s plans to launch a wireless service. Cogeco submitted a plan to offer a Hybird Mobile Network Operator (HMNO) wireless service, using its own spectrum and leasing network space from other carriers , to the Canadian Radio-television and Telecommunications Commission in February. That proposal is still awaiting approval from the regulatory agency. 

“Taking Cogeco out of the equation for Rogers is probably part of the equation to launch a hostile bid right now,” Ouimet said. 

Later at the same conference on Tuesday, Rogers CEO Joe Natale said the impetus behind the bid is whether Cogeco, which mainly operates in Quebec, will be a part of Rogers’ plans for the rest of the country. Rogers is the largest telecom operator in Canada. 

“As we sit here with our board and make our capital plans for the medium and the long term,  we’re asking a very fundamental question -- Do our plans include Cogeco territory or not?” Natale said. “It’s a question that we’ve asked over the years.”

Natale added that Rogers has been the largest individual shareholder in Cogeco for years, and though it has a 33% economic stake, the Audet family controls nearly 70% of the vote. 

“The question as we enshrine our capital plans and look at driving innovations, is that with Cogeco inside as part of a partnership here or is it not?” Natale said. “I’d hate to miss this technology innovation cycle and not have answered the question.” 

Despite a rather pointed rebuff from Cogeco’s largest shareholder, Altice USA CEO Dexter Goei isn’t throwing in the towel just yet, saying at an industry conference that his company remains committed to its effort to purchase the Canadian telecom operator.

Altice USA launched a $7.8 billion bid to purchase Cogeco on Sept. 2. As part of that offer -- made in partnership with Rogers Communications -- Altice would purchase Cogeco’s Atlantic Broadband U.S. cable business, while Rogers would buy its Canadian operations for $4.2 billion. The offer -- C$106.53 per share -- represented a 36% premium to Cogeco’s stock price on Aug. 31.

Cogeco responded quickly, publicly stating on Sept. 2 that its board would evaluate the offer, but adding that its controlling shareholder -- the Audet family -- had not expressed any intention to sell. On Sept. 7, Cogeco executive chairman Louis Audet, also the top representative for the Audet family trust that holds its Cogeco interest, made it clear that the family did not intend to sell.

“I want to provide absolute clarity to stakeholders regarding our intentions in response to the recent unsolicited proposal to acquire Cogeco. Our stocks are not for sale,” Audet said in the statement. “And let me be clear, our refusal is not a negotiating position, it is final.”

At the virtual Bank of America Merrill Lynch 2020 Media, Communications & Entertainment Conference Wednesday, Goei didn’t seem ready to give up yet.

“We’re working,” Goei said. “This is a marathon not a sprint. We’re committed to trying to come to an end game. From our standpoint, that’s very simple, which is we’d like to be able to acquire the U.S. assets.”

He added that Rogers already owns a 33% interest in Cogeco Communications and 41% of Cogeco, which it has held for a “very, very long time.” 

“They’d like to be able to sort out their situation, one way or the other,” Goei continued. “We are going to be committed to continuing this process and this project. We’ll see where it ends up.”

Goei wouldn’t say how that would happen or if Altice USA would raise its offer, but he did say that the deal would be a good fit, likening Atlantic Broadband to a smaller Suddenlink, the Midwestern operator the company purchased in 2015. 

“That entire Florida to Maine footprint that they have is geographically pretty contiguous,” Goei said. “We like cable, we like traditional MVPDs, and size matters in our space -- for the technology investments, for the infrastructure investments, for  the content costs, for all of the amortization of the operational costs of the business. It’s pretty straight forward in terms of the synergies. They’re in every single line item across the board.”

While Goei said the business will continue to do well without the deal -- Altice USA had its two best quarters of growth in Q1 and Q2 -- opportunities like Atlantic Broadband don’t come around often.

“The opportunity came to us as we got introduced to Rogers,” Goei said. “Rogers has a big focus on Canada and no interest in the U.S. and vice versa. It’s just a question of timing. ...It’s not a question in any shape or form of us needing to do anything in particular. It’s just that you need to be reactive in M&A situations and this was a perfect opportunity for us to be reactive.”

While the hope is that an agreement can be reached, Goei said if a deal does not materialize, life will go on. 

“Plan A all the time to the extent there is attractive M&A is available, we’ll always prioritize that,” Goei said. “We will always be looking at stuff out there, and to the extent that we find a target that we find very attractive for whatever part of our business we are looking to grow, then we will use those proceeds for that. Assuming that doesn’t happen, because M&A is fraught with low probabilities of success depending on what the asset is and who the seller is and what the process is, we will look to buy back more shares and even maybe delever our balance sheet. It depends on the opportunity.”

Canadian telecom company Cogeco’s controlling shareholder categorically rejected the unsolicited takeover offer launched by Altice USA last week, stressing that there is no room for negotiation.

Altice USA offered about $7.8 billion for Cogeco on Sept. 2, a tandem deal where it would buy the telecom company’s U.S. assets -- Atlantic Broadband -- for $3.6 billion, while Canadian communications giant Rogers Communications would purchase Cogeco’s Canadian assets for $4.2 billion. The deal, valued at about C$106.53 per share, represented a 36% premium to Cogeco’s trading price on Aug. 31.

Since the offer, Cogeco’s stock price has soared -- it closed at C$132.16 per share on Sept. 2. The stock fell to C$106.75 per share on Sept. 8 as it has become clear that the Audet family does not want to sell.

Altice USA shares, up about 3.5% on Sept. 2 to $28.65 per share, fell to $26.25 on Sept. 8.

In a statement issued Sept. 7, Louis Audet, the appointed representative of the Audet family, executive chairman of Cogeco and president of Gestion Audem, which holds the family’s stake in Cogeco, left no room for interpretation. 

“I want to provide absolute clarity to stakeholders regarding our intentions in response to the recent unsolicited proposal to acquire Cogeco. Our stocks are not for sale,” Audet said in the statement. “And let me be clear, our refusal is not a negotiating position, it is final.

“Our father started this business 63 years ago in Trois-Rivières, Quebec, sowing the seeds of a business that today has a story of incredible growth,” he continued. “The company went public in 1985 and annual revenues by that time had increased to $20 million. Today they are $ 2.5 billion. The company is well managed, growing, strategically positioned for the evolving and dynamic future of the telecommunications and media industries.

“My family, together with our boards of directors and our management team, are very proud and satisfied with our long term vision for the continued growth of Cogeco and the ownership structure that makes this long term vision possible.”

Cogeco had said the Audet family did not want to sell shortly after it received Altice USA’s offer. Altice had subsequently said it was open to starting a dialog and Rogers pledged to keep Cogeco’s headquarters in Montreal. That apparently wasn’t enough to sway the family.

Whether Altice USA will take its case to shareholders remains to be seen. The Audet family holds 69% of Cogeco Inc.’s  voting rights, which in turn controls 82.9% of the vote of subsidiary Cogeco Communications, so any deal would have to include them. Altice USA CEO Dexter Goei is scheduled to speak at the virtual Bank of America 2020 Media, Communications & Entertainment Conference today (Sept. 9) at 3:20 p.m. 

Hours after Altice USA launched a $7.8 billion unsolicited takeover offer for the Canadian communications company, Cogeco said it has received the bid and its board of directors will review it, but that its controlling shareholders don’t want to sell. 

Altice USA said earlier today that it had offered $7.8 billion for Cogeco in a deal that would give it control of the Canadian company’s Atlantic Broadband U.S. cable assets. In addition, Altice USA said it had an agreement to sell Cogeco’s Canadian operations to one of its largest outside shareholders, Rogers Communications.

In a statement  Wednesday, Cogeco said it received Altice USA’s unsolicited offer after the close of business on Sept. 1 and it will be submitted to and reviewed by its board of directors today (Sept. 2). But the company added that Gestion Audem, the group that holds the Audet family’s controlling interest in Cogeco, has already indicated its intentions.

“Gestion Audem Inc. has already indicated that it does not intend to sell its shares and will not support the proposal,” Cogeco said in the statement. “The Corporations will not comment any further at this time.”

In a statement, Altice USA replied that it believes its "offer is very attractive and in the best interest of all shareholders, and we look forward to hearing from the Board."

Altice didn't say whether it will increase its offer for the company. Either way, Cogeco appears to be in play. 

The deal appears to be a rich valuation for the company. According to Altice USA, its C$106.53 offer for Cogeco represents a 36% premium to its closing price on Aug. 31. Since the deal was announced, Cogeco stock has soared on the Toronto Stock Exchange to C$114.5, up 15%. Altice stock was up 3.4% to $28.61 each in early afternoon trading. 

As far as the U.S. cable assets, Altice USA’s $3.6 billion valuation represents about 10.2 times Atlantic’s 2020 estimated EBITDA, according to Evercore ISI analyst James Ratcliffe. In a note to clients, Ratcliffe said he suspected Cogeco Communications chairman Louis Audet at least was reluctant to sign off immediately on the deal. 

“The tone and phrasing of the release indicates to us that the offer does not (at least not yet) have the support of Louis Audet,” Ratcliffe wrote. “The release appears designed to appeal to other members of the Audet family, and also to an argument on the fiduciary duty of independent members of the Cogeco board.”

Barclays analyst Kannan Venkateshwar estimated that 70% to 80% of Atlantic Broadband’s footprint overlaps with DSL service and its broadband penetration at around 40% is relatively low, which could mean a big growth opportunity. He noted that the bulk of ABB’s footprint is already upgraded to provide speeds of up to 1 Gigabit per second. 

“Overall, while there is still uncertainty as to whether the deal will happen, it does provide some insight into [Altice USA's] continued focus on driving growth through smaller acquisitions,” Venkateshwar wrote, pointing to its July purchase of Service Electric Cable TV of New Jersey. 

"However, we do believe this path is likely to get tougher given its already high leverage, valuation levels in cable and family/private equity ownership of many of the remaining private cable assets," he  continued. "We continue to believe that [Altice USA] might be part of some other cable combinations in the future as has been speculated in the past, although the bid/ask likely remains quite wide.” 

Altice USA’s $7.8 billion bid for Canadian operator Cogeco has cast the spotlight on its U.S. cable gem, Atlantic Broadband

Atlantic Broadband burst on the scene in 2003 after its purchase of 230,000 subscribers in Florida and western Pennsylvania from Charter Communications (it closed the deal in 2004). That $735 million buy, backed by ABRY Partners, Oak Hill Capital and Merrill Lynch & Co., thrust its two top executives, former Continental Cable president Ed Holleran and former CEO David Keefe immediately into the top 15 cable operators in the country. 

The next eight years were characterized by smaller acquisitions, building out its network and organic growth. By June 2012, ABB was looking for a buyer and about a month later it found one -- Canadian cable and telecom company Cogeco. Cogeco agreed to buy ABB for $1.4 billion, and saw the U.S. operator as a vehicle to consolidate the American cable business.    

Atlantic Broadband did not disappoint, engineering a series of smaller deals -- like Harron Communications’ MetroCast Connecticut systems for $200 million --   and culminating in its 2018 purchase of the rest of Harron’s Metrocast properties for $1.4 billion. 

The MetroCast purchase was the largest for ABB since the Cogeco purchase and represented an integration challenge for the company, which it pulled off without a hitch. 

In the past few years ABB has focused on smaller purchases, including a small regional fiber company -- FiberLight -- in Florida in 2018,  a system in Springfield, West Virginia from Comcast in 2019,  and in January, Southeastern Connecticut broadband services company Thames Valley Communications for about $50 million.

Cogeco said Wednesday afternoon that it had received the Altice USA offer and that it would review it, but that its controlling Audet family has said it does not want to sell.  Analysts that follow Altice have noted that rejection was probably expected. Evercore ISI media analyst James Ratcliffe wrote that the holdout could be Cogeco chairman Louis Audet and that the bid was likely made public to sway other family members.  

Whether Altice USA raises its bid -- Cogeco stock already was up 15% to C$114.17 on Wednesday afternoon, well above the offer price of C$106.53 per share -- or another suitor enters the fray, ABB appears to be in play. 

That could be good news for Atlantic Broadband and the rest of the industry. Unlike other potential distribution assets that could find their way to the auction block -- AT&T is reportedly considering selling off a majority stake in satellite TV giant DirecTV -- ABB is considered to be well-run -- it has about 480,000 broadband customers and passes 1.1 million homes -- and could present some upside for a buyer. According to Barclays analyst Kannan Venkateshwar, 70% to 80% of ABB's footprint competes with slower speed digital subscriber line service and its broadband penetration is low at around 40%. Altice USA, with 49% broadband penetration, has been aggressive in building out fiber and boosting internet speeds, but so would any other buyer.  

“This potentially provides an opportunity to enhance the growth trajectory for ABB,” Venkateshwar wrote. 

Canadian tier 2 operator Cogeco Connexion announced the rollout of Ericsson’s recently rebranded MediaFirst IPTV platform.

The Montreal-based cable operator will deploy the MediaFirst TV platform with Android Google mobile services, encoding on-demand, video storage and processing Platform (VSPP), content management system (CMS) and professional services,

“Once integrated, Cogeco Connexion's new MediaFirst Video Experience will be entirely IPTV-based, voice activated, and will rely entirely on a media-optimized cloud-based TV platform," said Michel Blais, VP, engineering and operations, Cogeco Connexion, in a statement. ”We expect to make the service available to customers throughout our footprint by mid-year 2019 and it will then become the standard video experience offered to new customers."

Related: Ericsson Rebrands Media Solutions Unit as MediaKind

It was only in July when Ericsson announced that its Media Solutions unit, which includes the MediaFirst IPTV platform, has been rebranded as MediaKind. The unit includes technology Ericsson has acquired from such companies as Aspex, Azuki Systems, Envivio, Fabrix, HyCGroup and Tandberg Television. The division currently serves more than 900 cable, satellite and telecom service providers and broadcasters around the world with video delivery technology.

In January, One Equity Partners agreed to buy 51% of the Media Solutions business. MediaKind also named its senior executive team, led by CEO Angel Ruiz.

In its press release, Cogeco said, “Customers currently enjoying our existing video services, including the advanced TiVo solution, will continue to be offered their current services in the future as MediaFirst will coexist with these video platforms.”

In January 2017, Congeco announced the deployment of a TiVo-powered 4K DVR, along with the introduction of TSN 4K, a channel that provides Ultra HD coverage of live sporting events and games featuring the Toronto Maple Leafs, Ottawa Senators, Toronto Raptors, and Toronto FC.

Related: Bell Canada Rings Up Ericsson for Upgraded TV Platform

As for MediaFirst, other Canadian operators have deployed the IPTV platform, as well. In January, for example, Bell announced an expanded deal with Ericsson to make the platform part of the technology offering that serves more than 1.5 million Fibe TV and Alt TV subs in Canada.

Telus, another Canadian service provider that has previously used Ericsson’s MediaRoom, is announced in December of last year that it’s also upgrading to MediaFirst to augment Optik TV, its full-freight, managed IPTV service. Telus is also using Ericson’s MediaFirst platform to power Pik TV, an IP-delivered skinny bundle service that was introduced last year.

"Trends in TV viewing clearly show that operators must always innovate in order to offer a rich and customized customer experience,” said Ken Smithard, president of Cogeco Connexion. “After careful consideration, we are confident that the MediaFirst IPTV platform is the best vehicle to fulfill our promise to Canadian viewers by offering a cutting-edge technology with personalization features and greater ease of use for the kind of viewing experience our customers want and deserve."

Canadian cable operator Cogeco Communications said its U.S. subsidiary Atlantic Broadband has completed the $1.4 billion purchase of MetroCast Cable systems in five states.

The deal was first announced in July. MetroCast was owned by Harron Communications and had about 120,000 high-speed internet, 76,000 video and 37,000 telephone subscribers at the time the transaction was announced. MetroCast systems pass about 236,000 homes in New Hampshire, Maine, Pennsylvania, Maryland and Virginia

Cogeco said Atlantic Broadband raised about $1.85 billion in debt for the purchase, and obtained another $315 million through an investment from Caisse de dépôt et placement du Québec (“CDPQ”) for a 21% interest in Atlantic Broadband’s holding company. These proceeds were used to finance the $1.4 billion purchase price and to refinance Atlantic Broadband’s existing debt, the parent company said.

MetroCast will retain its existing brand name and will continue to offer its current TV, Internet and Phone services to business and residential customers. Starting in spring of this year, MetroCast will begin offering a suite of enhanced services under the Atlantic Broadband brand name.

Cogeco had purchased MetroCast systems in Connecticut in 2015 for about $200 million. Two years later, the Canadian company decided to go all-in, buying the rest of the company in a larger deal.

“After our highly successful acquisition and integration of the MetroCast Connecticut system more than two years ago, we understand the significant residential and business growth potential in this business,” said Atlantic Broadband CEO Richard Shea in a statement “A core strength of MetroCast has been its excellent operational and service team. We are pleased to welcome all MetroCast operating employees, including the local General Managers, to the Atlantic Broadband family. We look forward to working together to launch new and improved TV, Internet and Phone services to residential and business customers in these markets.”

Atlantic Broadband is the ninth largest cable operator in the U.S. and the deal was expected to increase its PSUs (personal service units, a mix of video, voice and broadband customers) from 602,000 to 835,000, according to earlier company statements.

“This acquisition establishes Atlantic Broadband as a strategic platform in the U.S. with a diverse footprint extending up the East Coast from Florida to Maine,” said Cogeco CEO Louis Audet in a statement. “It has been a great opportunity to partner with CDPQ for this transaction and we look forward to working with them to continue to grow this business in the U.S.”

Canada’s Cogeco Connexion has introduced a TiVo-powered 4K DVR that will enable customers in Quebec and Ontario to access programming in the pixel-packed format.

Cogeco also introduced TSN 4K, a channel that provides Ultra HD coverage of live sporting events and games featuring the Toronto Maple Leafs, Ottawa Senators, Toronto Raptors,  and Toronto FC.

The operator said more 4K channels will be added in the “coming weeks.” In the meantime, the new TiVo-based platform also provides access to Netflix and the OTT provider’s growing library of 4K content.

RELATED: Rogers Launches Big 4K Initiative

“This evolution in our offering is consistent with our ongoing commitment to better meet the changing needs of our customers, who are adopting 4K technology in ever greater numbers," Daniel Boisvert, VP, marketing and innovation at Cogeco Connexion, said in a statement. "We have always made our customers' needs our top priority and we are proud to enhance their television entertainment experience."

RELATED: Videotron Tunes in Live 4K-TV

Cogeco completed its initial rollout of a TiVo-based video platform in March 2015.

Rogers Communications and Videotron are among the other Canadian MSOs that also have trotted out 4K video offerings.

Atlantic Broadband launched its 1 Gigabit per second high speed data service for both residential and business customers in Connecticut Friday.

The residential service – called GigaEdge – and commercial offering Pro GigaEdge, is now available to about 37,000 homes and businesses passed in eastern Connecticut communities including East Lyme, New London, Niantic, Montville, Oakdale, Quaker Hill, Uncasville and Waterford.  

Atlantic Broadband launched the new offerings today at the Lyman Allyn Art Museum in New London. The launch event featured local government and business leaders and gave local residents the opportunity to demo GigaEdge.

“As we celebrate nearly one year of serving eastern Connecticut, we are tremendously proud to bring GigaEdge and Pro GigaEdge to the region,” said Atlantic Broadband Connecticut region vice president and general manager Charles Hanley in a statement. “We are committed to continuing to provide the fastest Internet speeds, the most complete entertainment, and the best hands-on local service to the communities we serve.”

Pricing for GigaEdge starts at $89.99 per month and $249.99 per month for Pro GigaEdge.

While Gigbit service is usually more suited to commercial customers, Atlantic Broadband president and chief revenue officer David Isenberg said in an interview that the operator expects to see strong interest in the product on the residential side.

“What we have seen as we have been talking to customers is that this is going to be a more mainstream offering in the residential market sooner than people think,” Isenberg said. “The reason is that today families live their lives online. When we asked people why they wanted this, we heard pretty commonly, ‘I have three kids, they’re all streaming stuff at different times; I need to do my work at home.’ It’s really about enabling families to do everything they need to do at once. We’re looking forward to strong demand on the residential side.”

The pricing of the product also should help drive residential demand – the $89.99 price tag is promotional for one year and then the service returns to its regular price of $119 per month.

The Connecticut rollout is the first system-wide DOCSIS deployment of a 1 Gbps service for Atlantic Broadband. The company plans to make the service available in Miami next, part of a $6 million infrastructure improvement program the company announced earlier.

Atlantic Broadband purchased the Connecticut system from Metro-Cast last year, and ABB parent, Canadian telecom company Cogeco Communications has said it is interested in adding further to its U.S. footprint. Isenberg said Cogeco hasn’t changed that stance and the Connecticut operation is a prime example its intentions – a year after closing the MetroCast deal it increased data speeds right away, launched TiVo and is now launching 1-Gig service.

“This is a case study of exactly what we want to do,” Isenberg said.  

Additionally, Atlantic Broadband has also launched new residential and business Internet services in the GigaEdge footprint (East Lyme, New London, Niantic, Montville, Oakdale, Quaker Hill, Uncasville, and Waterford) with new offerings and speeds, with its fastest speeds going from 120 Mbps/10 Mbps to 1 Gigabit or 1,000 Mbps/50 Mbps.

Canada-based operator Cogeco has appointed Luc Noiseux to the post of SVP and chief technology and strategy officer.

In that role, Noiseux will helm Cogeco’s development of emerging technology selection and deployment plans, and head up the operator’s corporate strategy and strategic planning process.

Noiseux joins Cogeco from Accedian Networks, where he headed up product development and the company’s chief of technology office. Prior to that, he held exec research and development roles at Alcatel-Lucent.

He holds a dual eMBA from the Université du Québec à Montréal and the Université Paris Dauphine, a Master of Science degree from INRS Télécommunications, and a Bachelor of Engineering degree from McGill University.

Noiseux’s “inclination towards fostering a work culture that is based on trust, clarity, and execution is perfectly aligned with Cogeco's values and will be key in supporting our leadership team and business units to shape and influence Cogeco technological ecosystem,” Cogeco president and CEO Louis Audet, said in a statement. “Luc's innovative and forward-thinking leadership and his entrepreneurial drive make him the ideal candidate to lead our technology and strategy office, developing a company-wide strategic direction to maintain and advance our competitive position and profitability."

Cogeco, the first Canadian operator to employ a TiVo-powered video platform,  has about 747,000 video subs, 728,000 Internet subs, and 446,000 phone subs. Atlantic Broadband, a Cogeco Cable subsidiary in the U.S., also uses TiVo and has 245,000 video customers, 249,000 Internet subs, and 95,000 phone customers.

About eight months after closing a $200 million deal to buy the Connecticut cable assets of MetroCast Communications, Atlantic Broadband parent Cogeco Cable said it will continue to look for opportunistic deals in the U.S., as well as wireless partnerships in its native Canada.

Cogeco bought Atlantic Broadband in 2012 for $1.4 billion and had expected to use the company to acquire other smaller operators in the U.S. While that hasn’t quite turned out as planned – the purchase of MetroCast’s Connecticut operations in August was the first deal Atlantic Broadband has done since 2012 – Cogeco CEO Luis Audet said the company still is open to doing deals.

On a conference call with analysts to discuss fiscal second quarter results April 14, Audet said Cogeco is still seeking “value-creating opportunistic acquisitions especially in cable in the United States.”

“I think we're in a position where we could do acquisitions if they present themselves, if they make sense, if they are profitable for our shareholders,” Audet continued, adding that in the past, Cogeco’s growth was 50% organic and 50% through acquisitions.

Part of Audet’s optimism about U.S. deals could be fueled by Atlantic’s continued success.  In the fiscal second quarter, U.S. cable revenue rose 18% (6% of which was from the Connecticut acquisition). Video subscriber losses doubled to 2,000 in the period, but that was due mainly to a decision to exit certain unprofitable businesses in Connecticut and the conversion of a few Multiple Dwelling Unit (MDU) customers from bulk to retail service.

Cogeco’s expansion plans aren’t limited to the U.S. market. On the call, Audet said the operator was keen to offer wireless service in Canada, but only through a MVNO agreement. He pointed to Shaw Communications’ recent purchase of Wind Mobile, adding that the deal has been a brilliant move for Shaw – the Canadian operator now has about 700,000 wireless customers in Ontario.

“If ever they want to work with us in partnership we’ll be delighted,” Audet said.

Barclays Research media and telecom analyst Philip Huang said in a note to clients that the MVNO approach makes sense, adding that it would provide a relatively economic path to a wireless offering.

“With all the other major cable companies in Canada (i.e. RCI, SJR, QBR, and Eastlink) now also operating wireless businesses, we believe [Cogeco] is feeling greater urgency to revisit options to add wireless to its portfolio of services,” Huang wrote.

Bell is the latest Canadian pay TV operator to forge a direct integration with Netflix, announcing Monday that it will provide access on set-tops powering its Fibe and FibreOP TV services.

Bell, which also markets its own multiplatform SVOD service, CraveTV, said all Fibe TV receivers have been automatically upgraded to support Netflix, which will offered as an app on the telco’s pay TV platforms.

Bell said it added 67,908 net new Fibe TV and FibreOP TV subs in Q3, and that it ended the period with 1.1 million IPTV subs, up 23% from the year-ago quarter.

Netflix launches service in Canada in 2010, but does not break out how many subscribers it has there. It ended the third quarter with 69.17 million subs worldwide, including 43.18 in the U.S.

Cogeco, a Canadian cable operator, also provides direct access to Netflix via a TiVo-powered offering that was introduced about a year ago.

Atlantic Broadband said Thursday that it has closed its purchase of MetroCast Communications of Connecticut, in a deal valued at about $200 million.

Atlantic Broadband first announced the deal in June.  The acquisition gives Atlantic Broadband and additional 23,000 TV, 22,000 Internet and 8,000 phone customers across nine communities in Eastern Connecticut. With the closing of the deal, Atlantic says it has about 246,000 video customers, making it the 12th largest cable operator in the country.

“With Eastern Connecticut’s strong demographics and MetroCast Connecticut’s well-maintained networks, this acquisition brings sizeable residential and business growth opportunities,” said Atlantic Broadband President and Chief Executive Officer, Richard Shea in a statement. “We are excited to welcome all Connecticut employees and I am also pleased to announce that Chap Hanley will be leading our Connecticut operations as Vice President & General Manager. Together, we look forward to delivering the best TV, Internet and Phone services along with even more responsive local support to all the communities we will now proudly serve in Eastern Connecticut.”

With the completion of this transaction, Atlantic Broadband, which was purchased by Canadian cable company Cogeco Cable in 2012, now has about 565,000 primary service units (PSUs) in five operating regions – Western Pennsylvania, Miami Beach, Maryland/Delaware, Aiken, S.C. and Eastern Connecticut.

“Nearly three years after our initial entry into the U.S. market, we are pleased to be continuing our geographic expansion into key growth markets,” said Cogeco Cable CEO Louis Audet in a statement. “This transaction enhances our growth profile through the planned launch of new residential services such as TiVo and Metro Ethernet for businesses.”

Cogeco Cable Canada said it has rolled out its new TiVo-powered offering in all operating markets following a launch Quebec.

Cogeco’s deployment, marking TiVo’s first with a Canadian MVPD, got underway in November 2014 in Ontario. Cogeco’s version integrates the Netflix OTT SVOD service alongside TiVo’s unified search platform. Cogeco’s TiVo service is also supported through the MSO’s TV app, which lets customers search and schedule recordings remotely, sideload DVR-recorded programs to smartphones and tablets, and stream live and recorded shows on mobile devices in the home.  Cogeco’s first version of the app runs on iPads and iPhones, but a new version for  Android devices is expected to debut sometime this spring.

Hoping to give its video subscriber base a boost, Cogeco picked TiVo after announcing  it had scrapped a plan to launch an alternative IPTV service. Atlantic Broadband, a Cogeco Cable subsidiary in the U.S., began to roll out a TiVo-powered service in the fall of 2013.

Cogeco also requires subs on its TiVo service to bundle in the MSO’s broadband service. Starting Monday (March 30), Cogeco is providing a new wireless cable modem outfitted with 802.11ac WiFi.

“Cogeco’s TiVo service will change our industry,” said Louise St-Pierre, president and CEO of Cogeco, in a statement. “We worked closely with TiVo to develop a platform that reflects the tastes and needs of Quebeckers, and we are proud to be able to offer it today. We developed Cogeco’s TiVo service to respond to what our customers consider important: a multi-screen experience that is intelligent, powerful, simple and mobile.” 

Atlantic Broadband has named Rich Shea president and CEO and Dave Isenberg as president and chief revenue officer of the Boston-based cable operator effective Jan. 1, replacing long-time executive Ed Holleran, who has decided to step down after 11 years at the company.

Holleran, who helped form Atlantic Broadband in 2003  with fellow Continental Cablevision veteran David Keefe and sold it to Canadian cable and electric utility concern Cogeco Cable in 2012, has agreed to stay on with the company, serving as vice president of industry relations on a part-time basis.

Both Shea and Isenberg have been with Atlantic Broadband since its inception in 2003. Shea began his career with Atlantic Broadband as chief information officer and has served as chief operating officer the past two years. Isenberg started as senior director, products and has been chief marketing and strategy officer since 2012.

Atlantic Broadband was purchased by Cogeco in 2012 for about $1.36 billion.  The company has about 227,000 customers in Western Pennsylvania, Southern Florida, Maryland/Delaware and South Carolina.

“This structure recognizes the complementary roles that Rich and Dave will have in the leadership of Atlantic Broadband going forward,” said Cogeco Cable CEO Louis Audet in a statement. “I’m confident that, with their years of experience at Atlantic Broadband since its very beginnings, having gained a wealth of knowledge on our business and our markets and a deep understanding of our customers, Rich and Dave will each play a key role in leading Atlantic Broadband to reach new summits. I am also very pleased that Edward will continue to serve as part of the Atlantic Broadband management team. As co-founder of Atlantic Broadband, his experience and relationships in the cable industry will be of great value to us going forward.”

Atlantic Broadband has launched an authenticated TV Everywhere portal for Web browsers that’s powered by TiVo and, therefore, shares the general look and feel of TiVo’s interface for set-tops, smartphones and tablets.

The new portal, for Mac and PC browsers, provides access to more than 35,000 TV shows and movies and is supported by nearly 40 networks, including A&E, Fox, TNT, Comedy Central, NFL Network, Cartoon Network, USA Network, Starz, and NBC, the MSO said. 

The portal comes way of the partnership Atlantic Broadband and TiVo announced about a year ago. Atlantic Broadband was the first MSO  to deploy TiVo’s T6 platform, which is TiVo’s operator-optimized version of its retail-focused Roamio Plus DVR. Atlantic Broadband was among the first U.S.-based TiVo partners to integrate Netflix on leased boxes.

“We recognize the TV viewership landscape has changed and our customers need to be able to watch what they want -- on any screen,” said Joe Canavan, VP of product management for Atlantic Broadband, in a statement. “Because so much viewing happens on laptops and computers, it was crucial for us to deliver a superb online portal experience.”

Atlantic Broadband, a wholly owned subsidiary of Canada’s Cogeco Cable, serves more than 230,000 customers in western Pennsylvania, Miami Beach, Maryland/Delaware, and Aiken, S.C. Cogeco introduced its TiVo offering last month.

Offering the gift of Netflix is becoming an increasingly popular customer-grabbing tactic among pay-TV providers.

Atlantic Broadband, one of several U.S. cable operators that offer direct access to Netflix via its leased TiVo platform, said it will boot up a promo centered on the popular subscription streaming service for the holiday season on Monday, November 3.

During the promo, which runs through December 31, new and returning customers who subscribe to any Atlantic Broadband TiVo bundle will also get three free months of Netflix. Eligible customers can pick from a range of double-play (TV and Internet) and triple-play bundles, with prices starting at $79.99 per month, the MSO said.

Consumers who take the offer will receive a Netflix promotion code within five to seven days of service installation. They must redeem the code via Netflix.com by February 15, 2015.

Atlantic Broadband joins a small but growing group of MVPDs that have used Netflix to drive new customers. Verizon Communications, for example, recently offered six months of Netflix and a $150 Visa gift card to new triple-play subscribers in the New York area. Dish Network tried a similar Netflix-focused promo earlier in the year to spark interest in its Hopper HD-DVR.

“Our goal is to seamlessly deliver customers with all the entertainment they want – whether that is their favorite cable programming or streaming content from the Internet – quickly, easily and right to their TV,” said David Isenberg, chief marketing and strategy officer, Atlantic Broadband, in a statement. “That’s why we integrated Netflix access into our TiVo bundles last spring and why we are so excited to launch this special holiday promotion. This three month Netflix gift subscription will make it easier for potential customers to enjoy the integrated Netflix experience we deliver through one device, on any screen in their home. We think it is a great way to kick off the holiday season.”

Atlantic Broadband serves more than 230,000 residential and business customers in Western Pennsylvania, Miami Beach, Maryland/Delaware, and Aiken, S.C.  Corporate cousin Cogeco of Canada is launching its own TiVo offering, which also features integrated access to Netflix, on Monday in Ontario.

Atlantic Broadband is deploying a TiVo model called the T6, which is essentially a leased version of the Roamio Plus. The T6 packs six tuners, 1 terabyte of storage, a CableCARD slot, and an integrated video transcoder for in-home streaming of live and recorded programming to smartphones and tablets.

Marking the start of TiVo’s first MVPD partnership in Canada, Cogeco announced Thursday that it will launch its TiVo-powered offering on Monday, Nov. 3, in Ontario, and extend it to systems serving Quebec in the spring of 2015 after they customize the interface, language and recommendations system for that market.

Cogeco’s version will offer “full Netflix integration” alongside TiVo’s unified search capabilities. The MSO’s TiVo service will also be support through the Cogeco TV app, which lets customers search and schedule recordings remotely, sideload DVR-recorded programs to smartphones and tablets, and stream live and recorded shows on mobile devices in the home. Cogeco’s app initially runs on iPads and iPhones, but the MSO expects to introduce an Android version of the app next April.

Cogeco will sell the service for C$20 per month for the first TV, and C$7 per month for each additional TV (via the TiVo Mini). Cogeco is requiring that TiVo customers subscribe to the MSO’s TV and Internet services and use a Cogeco-supplied wireless modem.

The launch comes more than three months after Cogeco announced that it had scrapped a plan to launch an alternative IPTV service and that it would instead move forward with the TiVo partnership. Atlantic Broadband, a Cogeco Cable subsidiary in the U.S., began to roll out a TiVo-powered service last fall.

The deal is TiVo’s first with a Canadian-based MVPD, and should help TiVo expand a customer base that stood at 4.80 million subscribers (937,000 TiVo-owned and 3.86 million through pay-TV partnerships) at the end of its fiscal second quarter. Cogeco has about 1.03 million video subs.

"Cogeco TiVo Service will be a game-changer in the cable market in Canada," said Louise St-Pierre, Cogeco Cable Canada president and CEO, said in a statement. "We have worked closely with TiVo to develop a platform that is customized for Canadian viewers, and we are proud to bring it to market today. We developed Cogeco TiVo Service in direct response to what our customers told us is important to them – great content, convenience, availability and ease of use. Cogeco TiVo Service delivers that, and more."

As the Canadian government readies hearings next week that could substantially reduce roaming rates for cellular telephone service, Montreal-based cable operator Cogeco Cable – which also has interests in the U.S. cable market – is contemplating creating its own wireless service for its customers.

Cogeco Cable already offers TV, Internet and landline phone service in Quebec and Ontario. In 2012, Cogeco purchased U.S. cable operator Atlantic Broadband in a deal worth about $1.36 billion.

In a statement, Cogeco said it would consider offering its own wireless service if the Canadian government manages to cut prices wireless networks charge to lease their lines. CEO Louis Audet has proposed creating a mobile virtual network operator (MVNO) which would buy network airtime from carriers and resell it to customers.

“Given the high concentration in the Canadian mobile wireless market, Cogeco strongly believes that regulatory measures fostering the entry of MVNOs in addition to other measures will increase competition in the market and enhance consumer choice,”Audet said in a statement. “A regulated MVNO option would definitely be in the best interest of Canadian customers and businesses.”

The Canadian Radio-television and Telecommunications Commission (the chief communications regulator in Canada, similar to the Federal Communications Commission in the U.S.) is scheduled to begin hearings on possibly regulating wholesale roaming rates next week. Cogeco is slated to testify before the CRTC on Sept. 29.

The regulatory agency has pushed for a fourth wireless competitor in the market to compete with Telus Corp., BCE Inc., and Rogers Communications, but hasn’t had much success. The three carriers currently control more than 90% of the wireless market in Canada, and Cogeco believes an MVNO, which would not have to spend the billions of dollars to build its own network, has a better chance of success.

In the U.S., the wireless business has been an elusive one for cable, dating back to the industry’s original partnership with Sprint PCS. Sprint, Comcast, Cox, Time Warner Cable and Bright House Network tried to partner again on a wireless service, called Pivot, which was abandoned in 2008.  In 2011, as part of its agreements to sell its wireless spectrum to Verizon Communications, Comcast, TWC and Bright House negotiated the right to co-market Verizon Wireless service with their cable packages. Cox, which didn’t sell its wireless spectrum in that deal, sold some of its licenses to Verizon later that same year, about a month after abandoning plans to build its own wireless network.

Canadian MSO Cogeco revealed in its third quarter earnings report that it has scotched a plan to roll out an alternative IPTV solution, and will instead move forward on a deal with TiVo.

Cogeco said its indirect cable subsidiary, Cogeco Cable Canada, was hit with an impairment of C$32.2 million tied to an IPTV project that encountered “performance issues” and has since been abandoned.

“Subsequently, in order to enhance its competitiveness, the Cogeco Cable Canada subsidiary has concluded a partnership with TiVo Inc.,” the company said, noting that the MSO expects to deploy a TiVo-based multiscreen solution in the first half of its 2015 fiscal year. Based on its current financial reporting structure, Cogeco would be expected to start rollouts before March 2015.

Cogeco and TiVo certainly aren’t strangers. Atlantic Broadband, a Cogeco Cable subsidiary that serves about 227,000 video subs in the U.S., began to roll out a TiVo-powered service last fall.

Cogeco represents a sizable North American win and a first with a Canadian-based MVPD for TiVo, which ended the first quarter of 2014 with about 4.5 million subscribers, with 3.58 million of them coming way of its partnerships with MVPDs.

Cogeco lost 9,620 video subs in its fiscal third quarter, reducing its total to 1.03 million (227,160 in the U.S., and 807,831 in Canada).

Cogeco posted third quarter revenues of $496.44 million, up 6.9% versus the year-ago quarter. Net profit dropped to C$35.5 million, from C$48.1 million, due in part to the impairment tied to the aforementioned failed IPTV project.

For fiscal 2015, Cogeco’s cable unit expects to generate revenues of C$2.03 billion, representing growth of C$75 million, or 3.8%, compared to revised guidance of C$1.95 billion for full fiscal 2014.

“Excluding the impact of the impairment related to the prior attempt at developing an alternate IPTV video platform, we expect to meet our fiscal 2014 guidance"  Cogeco president and CEO  Louis Audet said, in a statement.