Cablevision, a small but deeply hated cable company in New York City, has shelled out $1.4B for an even smaller company that owns systems in Colorado, Utah, Montana and Wyoming. Analysts studying the deal were described as “cautious” because it appears to make no sense.
In a note to clients Monday morning, [an analyst] asserted that Cablevision seems to be concerned that it will be at a disadvantage in a marketplace in which Comcast, the largest U.S. cable operator, is aggressively buying more programming assets. Cablevision is trying to get bigger, in the analyst’s view, to avoid “a catastrophic increase in programming costs” as a standalone entity. Most notably, Comcast is currently trying to acquire a controlling stake in NBC Universal from General Electric .
However, [the analyst] explained, “Bresnan is not big enough to materially change Cablevision’s own leverage with programmers.”
So essentially, people think Cablevision is freaking out and buying random companies. This is troubling because the main value of Cablevision is as a juicy and delicious takeover candidate, and now people are worried the company will never sell.
A cruise through the tipline archive suggests that Bresnan has some problems with its internet speeds, but we did also see an “above and beyond” email about it’s customer service. It’s a small company, with only about 300,000 customers.
As for Cablevision…
Cablevision buying Bresnan for $1.4B [MarketWatch]