Here's what analysts are saying after the deal broke late Wednesday night and snow pounded Wall Street on Thursday morning.
Oppenheimer's Timothy Horan
A deal makes huge strategic sense, and should be accretive to EPS despite a high price paid. In addition to basic synergies, a deal could incentivize the other MSOs to get behind Comcast's X2 video platform and its wifi/wireless, and reduce potential OTT competition.
The 8.4x 2014E headline number is about 5% higher than we would have expected and about a 20% premium to recent publicly traded cable stocks, but the synergies should offset half of this.
We believe this transaction will spur other consolidation including: Dish/DTV, S/TMUS, T/VOD. It likely will also cause these larger companies to look to acquire CLECs (TWTC or LVLT) and cloud providers (RAX).
UBS's John Hodulik
The proposed deal would extend Comcast's reach with its X1 platform. The company has shown improving video sub trends (and pos sub growth in 4Q) even before the new platform has been able to make an impact. We believe New Co. would make it more difficult for satellite to pick off additional video customers. We also expect the increased scale and reach of the company to better penetrate the mid and upper end of the business market.
The proposed deal is reportedly expected to close by YE and would undoubtedly come with an extension of the net neutrality provisions it agreed to with the NBCU deal, solving a problem for regulators and potential problem for Internet companies. The size and market power of New Co. would likely create more questions regarding the possibility of a DTV-DISH deal but we would note that a cable deal would not lessen the number of competitors in a market.