Cablevision Shareholders Win Big
Altice has offered much more than we thought the cable firm was worth on its own.
The Dolan family's decision to finally sell Cablevision (CVC) has unlocked tremendous value for shareholders. Altice's expectation that it will be able to manage the firm far more efficiently prompted the multinational company to pay far more than Cablevision would have been worth as a stand-alone entity, in our view.
After several years of spin-offs and asset sales, Cablevision has gotten back to its roots. The firm serves about 3 million customers across a service territory that includes 5 million households, primarily in the New York metro area. Cablevision benefits from many of the same network advantages as other U.S. cable companies. The firm upgraded its networks aggressively around the turn of the century, providing it with a platform to deliver television, Internet access, and phone services. The architecture of the network has also enabled the firm to upgrade its capabilities at low incremental cost.
Michael Hodel does not own shares in any of the securities mentioned above. Find out about Morningstar’s editorial policies.