Cablevision has agreed to be acquired by Netherlands-based telecom company Altice in a deal valued at $17.7 billion, or about $35 per share.
The deal, which must be approved by regulators, will create the fourth largest U.S. cable operator. It is expected to close in the first quarter of 2016 and will be financed by a combination of a $14.5 billion share issue, $3.3 billion in cash and Cablevision cash on hand.
Altice entered the U.S. cable market in May, when it bought Suddenlink Communications in a deal valuing the company at $9.1 billion. The Dutch firm had earlier tried to buy Time Warner Cable, but was bested by Charter Communications, whose $55 billion purchase of the business is still pending.
Cablevision serves more than 3 million residential and business customers, with approximately 65 percent subscribing to triple-play services. Besides the cable business, the acquisition includes: Lightpath, the company’s business services unit; News 12 Networks; Newsday Media Group, with Newsday, amNewYork and shoppers; and Cablevision Media Sales, the company’s advertising sales division.
Cablevision CEO James Dolan has hinted at a sale for several months, after having separated the company’s entertainment and sports divisions into separate firms. A more recent hint: A deal earlier this month to acquire the final 2.8 percent of Newsday, which had been owned by Tribune Media.
Patrick Drahi, founder and president of Altice, said he was proud the Dolan family had “entrusted” ownership of Cablevision to him and looked forward to “continuing the pioneering path they have paved for us.”
Cable insiders say Drahi’s strategy is to string together disparate cable operations and add cellular services, forming a “quad play” that could bring new revenues as millennial cord cutters abandon traditional cable television.