Cablevision sells Optimum West to Charter for $1.6B
Nearly three years after Cablevision (NYSE: CVC) bought Bresnan Communications for $1.36 billion in cash, the MSO said late Wednesday that it will sell the Optimum West cable systems in Colorado, Montana, Utah and Wyoming to Charter Communications (Nasdaq: CHTR) for $1.625 billion in cash.
Cablevision will earn a profit of $265 million from the deal, while Charter will pick up about 304,000 basic video subscribers and systems that pass more than 660,000 homes. Charter CEO Tom Rutledge is familiar with the Optimum West properties. He was COO of Cablevision when the MSO acquired the systems from Providence Equity Partners in November 2010. That deal came one year after Bresnan Communications founder and cable pioneer Bill Bresnan died from cancer at the age of 75.
"These former Bresnan properties operate in growing communities, and the network, employees and customer base have been well served for many years," Rutledge said in a prepared statement.
Cablevision has increased its capital spending in the last year to expand its Wi-Fi network, offer faster broadband speeds and deploy advanced services such as a cloud-based interactive program guide. By selling the Optimum West properties it will be able to focus on battling Verizon's (NYSE: VZ) FiOS TV and other rivals in its core metropolitan New York cable systems. It also gives the company capital that it can use to repair damage to its network from Super Storm Sandy.
Charter said Credit Suisse and Goldman Sachs are helping it finance the deal. The MSO said it will fund the acquisition with $1.5 billion in bank financing and liquidity from cash and its revolving credit facility.
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