French Group Interested In Time Warner Cable Inc (TWC)
Time Warner Cable Inc (NYSE:TWC) has got the attention of Altice, a French telecommunications group, for a possible buyout. While Altice is holding discussion, the company is to be close to acquiring Suddenlink, a small rival. The move is not only aimed at entering the American cable market but also expand it to buying Time Warner Cable.
There is every reason to believe that French Group would use Suddenlink as a frontal company to acquire Time Warner Cable Inc (NYSE:TWC). The move should be viewed in the context of Comcast Corporation (NASDAQ:CMCSA)’s failure to get the approval from the anti-trust regulator last month for merging Time Warner. Obviously, the French Group would not like to face a similar kind of situation when it enters the American cable market. The collapse of the merger could be a lesson for companies to come well prepared to avoid such a situation.
Altice is said to be ready to pay $10 billion to Suddenlink, which included debt and an announcement is in the cards anytime. However, the company has refused to talk anything about the ongoing negotiations. Interestingly, Time Warner Cable Inc (NYSE:TWC) has a market cap of $44.5 billion.
Following the abandoning of Comcast – Time Warner merger last month, Charter Communications, Inc. (NASDAQ:CHTR), a small rival, has also shown interest in acquiring Time Warner Inc (NYSE:TWC). This meant that the French Group would have to face a tough competition.
Charter Communications indicated its interest even before Comcast came into the picture. Now that Altice seems to be joining the race, a price war between the two to buy Time Warner could not be ruled out. Altice would be looking to wrap up the negotiations with Suddenlink so that it could be ready for a bigger buy.
As far as the billionaire Patrick Drahi-controlled Altice is concerned, acquiring Time Warner Cable Inc (NYSE:TWC) would allow it to consolidate its position in the American market further. Currently, Suddenlink is having about 1.43 million customers and focusing itself in the South and Midwest market in the United States.
Altice has become a serial acquirer after Drahi took the company public last year. However, it was focused more on the Europe. The group’s Numericable was used to acquire the second biggest mobile carrier SFR last year and snapped up Portugal Telecom.
Focus On US
Altice has now shifted its focus on the American cable market, which is considered as more competitive, as well as, bigger than the Europe. The recent moves are intended to make fresh inroads to expand its footprint geographically and shift in tactics.
Altice CEO, Dexter Goei, said recently that the company would continue to focus on M&A actively without specifying the region and the market. However, much of its efforts would depend on the successful acquisition of Suddenlink.
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