The Zacks Analyst Blog Highlights: Time Warner Cable, Cablevision Systems,
Charter Communications, Verizon Communication and AT&T
CHICAGO, Dec. 27, 2012
CHICAGO, Dec. 27, 2012 /PRNewswire/ --Zacks.com announces the list of stocks
featured in the Analyst Blog. Every day the Zacks Equity Research analysts
discuss the latest news and events impacting stocks and the financial markets.
Stocks recently featured in the blog include Time Warner Cable Inc.
(NYSE:TWC), Cablevision Systems Corp. (NYSE:CVC), Charter Communications Inc.
(Nasdaq:CHTR), Verizon Communication Inc. (NYSE:VZ) and AT&T Inc. (NYSE:T).
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from the Pros newsletter: http://at.zacks.com/?id=5513
Here are highlights from Wednesday's Analyst Blog:
TWC Bids for Optimum West
Time Warner Cable Inc. (NYSE:TWC), the second largest cable multi service
operator (MSO) in the U.S., has made a bid to acquire Cablevision Systems
Corp.'s (NYSE:CVC) business unit – Optimum West. The acquisition will make
Time Warner Cable a key player in four distinct US markets.
If the cable MSO succeeds in buying Optimum West then it could add up to
300,000 cable customers in Montana, Wyoming Colorado and Utah. However, none
of the companies have disclosed the financial details of the deal, which is
expected to be reached either in January or February 2013.
In 2010, Cablevision Systems had purchased a controlling stake in smaller
cable rival Bresnan Systems from Providence Equity Partners for a total
consideration of $1.37 billion and renamed it as Optimum West. However, since
November 2012, the company has been trying to sell the cable assets,
attracting the interest of several bidders in due course.
According to Bloomberg, other than Time Warner Cable, currently there are two
more potential bidders for the cable firm, which include Charter
Communications Inc. (Nasdaq:CHTR) and Suddenlink Communications. The deal, if
completed, will be the second acquisition by Time Warner Cable in quick
succession after it acquired Insight Communications for $3 billion, eventually
adding 760,000 cable customers in Indiana, Kentucky and Ohio.
At the end of the third quarter of 2012, the company's Residential Video
subscribers' base was 12.159 million. Time Warner Cable lost nearly 140,000
residential video subscribers in the previous quarter amidst stiff competition
from telecom service providers like Verizon Communication Inc. (NYSE:VZ) and
AT&T Inc. (NYSE:T), which are capturing market share from cable MSOs by
offering fiber-based TV to its subscribers. Furthermore, they are also facing
challenges from the non-cable operators, which provide live video streaming
services over the Internet.
We believe bidding for the cable firm is a strategic move by the company to
revamp its falling pay TV business. Apart from enhancing the company's
impressive customer base, the acquisition of Optimum West business could also
boost its top line. On the flip side, continuous acquisitions could increase
the company's leverage, which in turn could hurt its margin.
We retain our long-term Neutral recommendation on Time Warner Cable Inc. Also,
it has a Zacks #3 Rank, implying a short-term Hold rating.
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