Atlantic Broadband, several months after closing its $1.125 billion purchase of systems in Cleveland and Columbus, Ohio from WideOpenWest, said it will rebrand its systems throughout the country under the Breezeline name, and added that it plans to launch a streaming video product — Breezeline Stream TV — later this year.

Atlantic Broadband, part of Canadian telco Cogeco Communications, had operated primarily on the East Coast, but said in a press release that the addition of the Ohio systems prompted the name change. The company closed on the purchase of the WOW systems, which pass about 688,000 homes and have nearly 200,000 broadband customers, in September. 

“We’re no longer just an East Coast provider, and we’ve long offered much more than broadband, so our company identity must evolve with us,” Atlantic Broadband president Frank van der Post said in a statement. “The name Breezeline marks the beginning of a new, exciting era of transforming our company through new growth, while also elevating the customer experience through enhanced customer care options, innovative products and investment in the latest technologies.”

Atlantic Broadband began expanding its fiber network last year, and plans to extend its reach to more than 70,000 homes in New Hampshire and West Virginia with its fiber-to-the-home technology. 

Breezeline Stream TV is a cloud-based video offering that will allow customers to access live and recorded programming on compatible devices in and out of the home. The service will be available in select markets early this year and will expand throughout 2022. 

Atlantic Broadband said it will introduce Breezeline in its existing markets beginning today (January 10) and the former WOW communities will transition to the new moniker by the summer. The company also has launched a series of new customer care initiatives, including enhanced self-service options, a new online experience and simplified, transparent pricing. A new customer app is planned for release early this year.  

“The Breezeline name was chosen to convey our commitment to providing easy access to connected experiences for our customers,” Breezeline VP of marketing Julie Sullivan said in a press release. “The Breezeline logo, a five-point pinwheel, represents our customers and the communities we serve, the innovation and services that enrich customers’ lives and the elevated experiences we strive to provide in a seamlessly connected world. The pinwheel also implies motion — symbolic of both high-speed connectivity and the ease with which customers can interact with our company and services.”

Atlantic Broadband is the eighth-largest cable operator in the U.S. and provides residential and business internet, TV and voice services to customers in 12 states: Connecticut, Delaware, Florida, Maine, Maryland, New Hampshire, New York, Ohio, Pennsylvania, South Carolina, Virginia and West Virginia. ■ 

With its nearly $4 billion bid to acquire Atlantic Broadband all but a memory, Altice USA CEO Dexter Goei told analysts Wednesday that the company still wants to grow via acquisitions, and has its eye on a handful of potential “bite-sized” deals. 

“We definitely want to go out there and find attractive MVPDs to acquire,” Goei said on a conference call to discuss Q4 results. He added that while there are a handful of smaller operators to acquire, that field is narrowed, due to geographic and competitive reasons, is further narrowed down to “a couple.” 

Altice USA teamed up with Canadian telecom company Rogers Communications to launch an unsolicited bid for Atlantic Broadband parent Cogeco in a deal valued at about $7.8 billion. Altice USA originally said it would spend $3.6 billion for Atlantic Broadband, upping that bid to about $3.9 billion, but was continuously rebuffed by Cogeco’s controlling shareholder. After several attempts to get a deal done, Altice USA officially abandoned the effort in November.  

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

Goei echoed his Q3 comments concerning future M&A, in that small deals, like its July purchase of Service Electric Cable TV of NJ for $150 million, are just as appealing as the bigger transactions.

“The bite-sized, Service Electric-type acquisitions are very attractive for us,” Goei said. “Hopefully, we’ll be able to unlock one of those this year. But we’ll continue to try to unlock as many of those as possible.”

Goei said that in the absence of M&A, Altice USA would use those resources to buy back its stock. But he added he wouldn’t turn down a large deal if it came along.

“If something like an Atlantic Broadband comes up for sale, or even a larger size than that, we definitely continue to believe that M&A is the best use of our capital if anything is available,” Goei said.

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, 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.

After a tersely worded rejection by the head of the family trust that controls most of the voting rights of Canadian telecom company Cogeco Inc., Altice USA may have to focus its efforts on the remaining family members if it wants its unsolicited takeover attempt to move forward.

Altice USA joined hands with Canadian communications giant Rogers Communications to launch an aggressive $7.8 billion takeover of Cogeco, the fourth-largest telecom company in Canada, on Sept. 2. Altice USA, based in New York, is only interested in Atlantic Broadband — Cogeco’s U.S. cable operations — which it offered to buy for $3.6 billion, or about 10.2 times forward-looking cash flow. Rogers, which owns a 41% interest in Cogeco, has offered $4.2 billion for the company’s Canadian operations. 

It didn’t take long for Cogeco to reject that offer. In a statement, Louis Audet — Cogeco’s executive chairman and head of Gestion Audem, the holding company for his family’s stake in the telco — did so flatly.

 “Our stocks are not for sale,” Audet said. “And let me be clear, our refusal is not a negotiating position, it is final.”

That didn’t appear to faze Altice USA CEO Dexter Goei who, at the virtual Bank of America Merrill Lynch Media, Communications & Entertainment conference Sept. 9, said Altice was still working on getting a deal done.  

Altice’s Long Game

“This is a marathon, not a sprint,” Goei said at the conference. “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.”

Altice burst on the scene in 2015 with its $9.1 billion purchase of Suddenlink Communications and followed that with the $17.7 billion buy of Cablevision Systems a year later. An IPO in 2017 raised about $1.9 billion and created a deal currency many expected would be used to roll up smaller operators. But since the Cablevision deal, Altice USA has managed just one purchase — Service Electric Cable TV of New Jersey for $150 million —  an all-cash deal that closed in July. In the meantime, under some pressure from analysts to maintain its growth trajectory,  the company has made M&A a priority.  “We will always be looking at stuff out there,” Goei said at the Bank of America conference.

In detailing the offer on Sept. 2, Altice USA said that because of Cogeco’s corporate structure — Gestion Audem owns 69% voting control of Cogeco and 71% of Cogeco Connections’ voting rights — a deal would have to receive the Audet family’s blessing. Unlike other unsolicited deals, trying to circumvent the family by soliciting the favor of other shareholders would serve no purpose. 

So if Altice and Rogers are serious, they’ll have to appeal to individual family members, a notion not lost on Evercore ISI media analyst James Ratcliffe.  In a Sept. 2 note, he pointed out that the tone of the press release announcing the offer seemed to indicate it had yet to convince Louis Audet of the benefits of a deal. 

“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,” he wrote.

In a Sept. 2 press release, Altice highlighted the $612 million in cash as part of the offer that would go to Gestion Audem.  

The situation is reminiscent of an earlier unsolicited takeover of a family-controlled media asset: News Corp.’s $5.6 billion purchase of Dow Jones & Co. in 2007.

Back then, the Murdoch family-led News Corp.’s unsolicited $5 billion bid — a 67% premium to its share price — blindsided Dow Jones’s ruling Bancroft family. As with Cogeco, initially the Bancrofts rejected the offer, concerned about News Corp.’s tabloid reputation. But three months later, after targeting younger, more eager-to-sell members of the Bancroft clan, Murdoch had a deal.

Whether that can be the path toward a Cogeco deal remains to be seen. The Bancroft trust included dozens of family members with diverse interests regarding their stakes. According to the Cogeco website, Gestion Audem is more closely held, with Louis Audet, the only family member among Cogeco senior management, holding the biggest piece (29.16%). He is followed by his brothers Bernard (17.7%) and Francois (13.89%) and two trusts: Fiducie la Fuente (17.71%) and Fiducie des Aulnes (21.53%).

Ultimately, a sale would depend on Altice and Rogers’ ability to increase the offer and the Audet family’s willingness to accept it. While Rogers has long coveted Cogeco’s Canadian assets, Altice USA’s ability to up the ante could be trickier.

Price May Be Too Steep

“If they can get it for anything like their offer price, it would be a great addition,” MoffettNathanson principal and senior analyst Craig Moffett said in an email.  “It would help them diversify away from the low-growth New York-area Optimum business, and would give them a longer runway for broadband growth and consolidated margin expansion.”

Sanford Bernstein media analyst Peter Supino said given the potential of the Atlantic Broadband systems, Altice USA should have no problems going higher if it wants to.“I think that the company should be willing to pay higher prices and really pay right up to its point of economic indifference for the asset,” he said.

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.”

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.” 

Atlantic Broadband said it has signed a definitive agreement to purchase Thames Valley Communications, a Southeastern Connecticut broadband services company, for about $50 million.

The deal, expected to close in about three months, would add about 10,000 broadband customers in Groton, Mystic, Stonington, Pawcatuck and Gales Ferry. Atlantic Broadband already has a strong presence in Connecticut, after its 2015 purchase of MetroCast’s operations in that state. 

“The acquisition of Thames Valley Communications will nicely complement our presence in Southeastern Connecticut, as our businesses share the same values of customer focus and support of the communities we serve,” said Atlantic Broadband president Frank van der Post, in a press release.

Morgan Lewis LLP served as Atlantic Broadband’s legal counsel in the transaction. RBC Capital Markets served as M&A adviser for Thames Valley and Lowenstein Sandler LLP served as its legal counsel.

Atlantic Broadband is a subsidiary of Canadian telecom company Cogeco Communications. In a separate press release, Cogeo CEO Philippe Jetté said the deal is characteristic of ABB’s plans to boost its U.S. presence.

“Cogeco Communications is pursuing its growth strategy in the United States,” Jetté said in the press release. “We always look to expand our presence in the U.S. broadband market and the acquisition of Thames Valley Communications represents another step forward in our growth plan.”

Atlantic Broadband CEO Richard Shea has resigned from the mid-sized cable operator to pursue other interests, ABB parent Cogeco Communications said Thursday. Atlantic Broadband chief financial officer Patrick Bratton will serve as interim CEO of the company while a search for a permanent CEO begins.

Atlantic Broadband is the ninth largest cable operator in the U.S., with about 307,000 video service subscribers in 11 states -- Connecticut, Delaware, Florida, Maine, Maryland, New Hampshire, New York, Pennsylvania, South Carolina, Virginia and West Virginia. Headquartered in Quincy, Massachusetts, the company was purchased by Canadian telecom giant Cogeco Communications in 2012 for $1.36 billion.

Shea joined Atlantic Broadband in 2003 and has held several positions, including chief information officer and chief operating officer, before being named CEO in 2015. 

Shea is a graduate of the U.S. Military Academy at West Point and served as an officer in the army overseas and in the United States before achieving the rank of Captain. 

Related: A Small Op That Pulled Off a Big Task

He steered the company through several acquisitions, including the $1.4 billion purchase of MetroCast in March 2018 that added 120,000 broadband and 76,000 video customers to the cable operator. 

Cogeco said Shea will remain with the company for a short period of time to ensure a smooth transition.

“On behalf of my colleagues and the entire Cogeco Communications team, I’d like to thank Rich for his contribution to Atlantic Broadband and to our company and wish him every success in his future endeavours,” Cogeco Communications CEO Philippe Jetté said in a press release.