Cable television system operator
said Wednesday that it had reached a definitive agreement to acquire the outstanding 45% stake in
Comcast MHCP Holdings
for $750 million.
The deal, like a similar one announced Wednesday, was warmly received by the market and analysts, even though Comcast had previously announced that it planned to acquire the California Public Employees' Retirement System's stake.
Comcast, the third-largest cable provider in the U.S., jumped 2 5/8, or 5%, to 54 13/16. (Comcast settled up 4 1/4, or 8%, to 56 1/2.)
"This amounts to three pitches right down the middle of Comcast's strike zone," said James Boyle, an analyst at
First Union Securities
, referring to the three states -- New Jersey, Michigan and Florida -- where Comcast MHCP serves about 642,000 subscribers.
The deal is expected to close in the first quarter of 2000.
In addition to gaining full ownership of Comcast MHCP, Comcast also got away with an "excellent price," Boyle said.
The Philadelphia-based company paid $2,600 per subscriber, compared with the going rate of $4,000 to $5,000 per subscriber. Boyle attributed the low price to the fact that Comcast did not have to pay a premium since it was only buying a minority stake.
Calpers originally paid $250 million for its stake in Comcast MHCP in 1994.
Boyle rates Comcast a buy and does not do any underwriting for the company.
Over the past few months, Comcast has announced a host of deals, demonstrating its aggressive approach to consolidating its hold over large swaths of territory and increasing its managerial flexibility.
"They are trying to make sure they own and control cable systems in their territories," said Tom Wolzien, an analyst at
Sanford C. Bernstein
The firm, which does not do any underwriting, rates Comcast a buy, according to Baseline, which tracks market data.
On Wednesday, Comcast announced an
agreement to buy all of the outstanding shares of
in a stock deal valued at about $3 billion.
That deal followed one in November in which Comcast said it would
for stock valued at more than $5.2 billion.
Over the past year, Comcast has increased its subscriber base to 8.2 million customers from 4.6 million.