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WideOpenWest Jumps on Plan to Sell Some Service Areas for $1.8B

WOW agreed to sell its service areas in Chicago, Cleveland and Columbus, Ohio,  Evansville, Ind., and Anne Arundel, Md., for $1.8 billion.
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WideOpenWest  (WOW) - Get WideOpenWest, Inc. Report shares jumped on Wednesday after the broadband provider said it would sell five service areas in two transactions totaling $1.8 billion.

The moves will enable the Englewood, Colo., company to lower its debt.

Shares of WideOpenWest recently traded at $20.44, up 12%. They have jumped 98% over the past six months amid strong consumer demand for broadband.

WOW agreed to sell its Cleveland and Columbus, Ohio, service areas for $1.125 billion and its Chicago, Evansville, Ind., and Anne Arundel, Md., service areas for $661 million.

Atlantic Broadband, a subsidiary of Cogeco Communications CGECF, agreed to buy the Cleveland/Columbus markets.

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Astound Broadband (doing business as RCN, Grande Communications and Wave Broadband) agreed to acquire the Chicago/Evansville/Anne Arundel markets.

“The divestiture of these markets will enable us to reduce our debt as we continue to execute our broadband-first strategy, including pursuing our Edge-out and greenfield strategies and expanding our commercial services," WOW Chief Executive Teresa Elder said in a statement.

The transactions are expected to close in the second half. At closing, WOW's leverage multiple will be 2.5 times, half the figure at March 31, with the drop driven by lower net debt, the company said.

Meanwhile, broadband titan Comcast  (CMCSA) - Get Comcast Corporation Class A Report was the subject of rumors last week that it’s pondering a bid for ViacomCBS  (VIACA) - Get ViacomCBS Inc. Class A Report and Roku  (ROKU) - Get Roku, Inc. Class A Report.

Comcast called the possibility "pure speculation."

Citing sources, The Wall Street Journal reported that Comcast CEO Brian Roberts had considered a transaction with ViacomCBS or an acquisition of streaming-tech major Roku. At the same time, the executive has made clear that Comcast doesn’t need them, the paper reported.