New York City concerned about the deal, whether it could go through successfully amidst the decline of the cable operator.
Cablevision Systems Corporation is in a middle of nowhere currently. Altice NV approached the cable company for a possible deal that seemed to be going quite well, but all turned around suddenly. Altice NV was paying a massive $10 billion to buy out the TV cable operator but the deal is running into an ‘unexpected turbulence’.
The European telecom giant announced the acquisition deal in September but this had no positive impact on the company or its shares. Instead, its shares have further declined in the market. This raised many concerns for the management, investors, and loyalists. However, there are various other apprehensions of the deal.
The shares have gone further down even below Altice’s all-cash offer of $34.90 per share. To be precise, the stock of Cablevision Corporation declined by 9% and is currently trading below the agreed takeover price. This has raised concerns among the shareholders and investors regarding this deal.
Analyst at MoffetNathanson LLC, Craig Moffett, stated, “The spread has widened in large part because people have become increasingly concerned that neither the city nor the state will find that the transaction is in the public interest, or alternatively, they’ll demand so much in terms of givebacks that ultimately the deal won’t be palatable to Altice.”
The Wall Street Journal reported that New York City regulators have several concerns not only regarding this deal but about its closure as well. Furthermore, it is believed that New York City has showed authority by saying that it can deny the deal anytime it wants but only ‘if’ it does not find the public interest in it. It is known that the company’s massive 3.1 million customer base is concentrated mostly in the NY market.
On the other hand, Maya Wiley, top legal counsel of Mayor Bill de Blasio, expressed her concerns as well. She stated that the city is anxious whether the European telecom operator has enough financial resources through which it can buy out Cablevision without “skimping” on customer service and infrastructure upgrades for better Internet speeds. She further added that the city is worried about the impact that this deal would have on job opportunities. On many previous occasions, Altice has opted for cost cutting strategies.
She stated, “Altice is talking about $900 million in synergies. Well, what’s getting cut? How’s that going to impact the economy of New York and quality of services? We certainly are not afraid to disapprove a transaction.”
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