Citigroup predicts Cablevision will be sold within 18 months

Cablevision (NYSE: CVC) management will likely attempt to sell the company within the next 18 months, Citigroup analyst Jason Bazinet said in a research note Friday.

The MSO, which faces stiff competition from Verizon's (NYSE: VZ) FiOS TV in the New York metropolitan area, has increased capital spending to convert to an all-digital platform and expand its Wi-Fi footprint. Its earnings have also been impacted by basic video subscriber losses and damage to its network from Hurricane Sandy.

Cablevision stock, which was trading at $14.20 per share Friday morning, will likely drop to $11 in the next year if it is not sold, Bazinet projects. "We see few economic incentives for the Dolans to take the risk and hold out. We expect Cablevision will be sold in the next 12-18 months," Bazinet wrote.

Last month, Cablevision agreed to sell the former Bresnan Communications cable systems in its Optimum West division to Charter Communications (Nasdaq: CHTR) for $1.6 billion. When Cablevision CEO Jim Dolan was asked in November if he would ever consider the Optimum East cable systems in New York, New Jersey and Connecticut, he said the company was focused on growing its business, but that it would always consider options.

"We're a public company and we operate for the benefit of all of our shareholders. And so you can never say that you would just wouldn't listen. But at this time, we're really focused on what we're doing with the operation and making it into what we think we could be," Dolan said on Cablevision's third-quarter earnings call.

For years, industry observers have predicted that Cablevision would eventually merge with Time Warner Cable (NYSE: TWC), which has about 1 million subscribers on its New York City division. Comcast (Nasdaq: CMCSA) also owns cable systems near Cablevision's footprint.

For more:
- Investors Business Daily has this story
- see transcript from Q3 earnings call

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