Altice USA said it has made an offer to buy Canadian telco Cogeco, parent of U.S. cable company Atlantic Broadband, for $7.8 billion in cash.
Atlantic Broadband has subscribers in 11 states -- Connecticut, Delaware, Florida, Maine, Maryland, New Hampshire, New York, Pennsylvania, South Carolina, Virginia and West Virginia -- and is the ninth largest cable operator in the U.S. Adding Atlantic Broadband would expand Altice’s reach down the entire East Coast and would add roughly 480,000 subscribers to its rolls. Altice USA currently has about 5 million broadband and video customers in the New York metropolitan area and in the Midwest and Southwest under the Suddenlink Communications name.
Altice USA shares rose by about 5% in early trading Wednesday to $29.12 each.
Cogeco is the second largest cable and telephone operator in Ontario and Quebec -- it has about 800,000 internet customers in those provinces. Those businesses would be sold to Canadian telco Rogers Communications, which also is Cogeco’s largest long-term shareholder, in a separate deal, Altice USA said in a press release.
Altice USA said it would spend about $3.6 billion for the Atlantic Broadband assets.
So far, Cogeco hasn't publicly responded to the offer.
Cogeco is mainly controlled by the Audet family -- Louis Audet is executive chairman of the company -- so its support is critical to the deal going through. The offer includes $612 million to the Audet family for their ownership interests. Rogers, which owns 41% of Cogeco’s outstanding voting shares, supports the Altice USA deal.
The deal values Cogeco at C$106.53 per share, a 36% premium to its closing price on Aug. 31.
“We greatly respect and appreciate the legacy the Audet family has created with Cogeco, building an iconic company across Canada and the U.S. that is driven by superior customer service and continuous investments in technology. We are pleased to present this very attractive offer for Cogeco, and are confident that Mr. Audet and the Cogeco boards will act in the best interest of all shareholders and fairly evaluate this offer. We look forward to the opportunity to extend Altice USA’s high-quality broadband, video, mobile, and news offerings to more than 1.1 million additional homes and businesses.”
The smarter way to stay on top of the multichannel video marketplace. Sign up below.
Thank you for signing up to Multichannel News. You will receive a verification email shortly.
There was a problem. Please refresh the page and try again.