This Day On The Street
Continue to site right-arrow
ADVERTISEMENT
This account is pending registration confirmation. Please click on the link within the confirmation email previously sent you to complete registration.
Need a new registration confirmation email? Click here
TheStreet Open House

Cablevison Leaps on Time Warner Cable Buyout Speculation

Stocks in this article: CVC TWC LMCA CHTR

NEW YORK ( TheStreet) -- Cablevision (CVC ) surged on speculation that the New York-focused telecom is a takeover target as consolidation of the telecom industry accelerates.

Bethpage, New York-based Cablevision surged 9.6% to close Monday at $18.44.

The potential for mergers among pay-TV operators has grown in the wake of Liberty Global (LMCA )'s decision to increase its stake in Charter Communication (CHTR ) to 27%. The investment by John Malone, Liberty's chairman, has prompted speculation that Charter might attempt to acquire Time Warner Cable (TWC - Get Report) even though it is a smaller company.

Telecommunication companies have been looking to consolidate to offset rising programming costs.

In a July 1st report, Bank of America analysts said the most likely scenario would be a Time Warner Cable bid for Cablevision.

"Both trade at similar multiples, share truly contiguous footprints," wrote the team led by Jessica Reif Cohen, "and the transaction could be done with significantly less leverage for TWC than a CHTR deal."

The analysts said that the combination could be established and by raising about $8 billion, Time Warner could minimize dilution during a share buyback. Bank of America assumes Cablevision could be bought back at $27 per share, and would lead to 32 million additional shares being issued. The analysts state that this situation would lead to "less than 10% dilution of equity at current levels."

Nonetheless, investing in both Cablevision and Time Warner may be risky as "the stocks are currently trading on deal-speculation rather than fundamentals" said Bank of America in the report. The Dolan family-controlled company which owns Madison Square Garden and the AMC network has rejected previous buyout offers.

-- Written by Robert Arenella in New York

>To contact the writer of this article, click here: Robert Arenella.

Check Out Our Best Services for Investors

Action Alerts PLUS

Jim Cramer and Stephanie Link reveal their investment tactics while giving advanced notice before every trade.

Product Features:
  • $2.5+ million portfolio
  • Large-cap and dividend focus
  • Intraday trade alerts from Cramer
Quant Ratings

Access the tool that DOMINATES the Russell 2000 and the S&P 500.

Product Features:
  • Buy, hold, or sell recommendations for over 4,300 stocks
  • Unlimited research reports on your favorite stocks
  • A custom stock screener
Stocks Under $10

Jim Cramer's protégé, David Peltier, uncovers low dollar stocks with extraordinary upside potential that are flying under Wall Street's radar.

Product Features:
  • Model portfolio
  • Stocks trading below $10
  • Intraday trade alerts
Try it NOW
Try it NOW
Try it NOW

Check Out Our Best Services for Investors

Dividend Stock Advisor

Jim Cramer's protégé, David Peltier, identifies the best of breed dividend stocks that will pay a reliable AND significant income stream.

Product Features:
  • Diversified model portfolio of dividend stocks
  • Updates with exact steps to take - BUY, HOLD, SELL
Trifecta Stocks

Every recommendation goes through 3 layers of intense scrutiny—quantitative, fundamental and technical analysis—to maximize profit potential and minimize risk.

Product Features:
  • Model Portfolio
  • Intra Day Trade alerts
  • Access to Quant Ratings
Options Profits

Our options trading pros provide over 100 monthly option trading ideas and strategies to help you become a well-seasoned trader.

Product Features:
  • Actionable options commentary and news
  • Real-time trading community
Try it NOW
Try it NOW
Try it NOW
To begin commenting right away, you can log in below using your Disqus, Facebook, Twitter, OpenID or Yahoo login credentials. Alternatively, you can post a comment as a "guest" just by entering an email address. Your use of the commenting tool is subject to multiple terms of service/use and privacy policies - see here for more details.
Submit an article to us!

Markets

DOW 17,191.37 -195.84 -1.13%
S&P 500 2,002.42 -27.13 -1.34%
NASDAQ 4,637.9940 -43.5030 -0.93%

Partners Compare Online Brokers

Free Reports

Free Newsletters from TheStreet

My Subscriptions:

After the Bell

Before the Bell

Booyah! Newsletter

Midday Bell

TheStreet Top 10 Stories

Winners & Losers

Register for Newsletters
Top Rated Stocks Top Rated Funds Top Rated ETFs