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CIBC Keeps Sector Outperform on Cox Communications


CIBC World keeps sector outperform on Cox Communications (COX).

Analyst Cannon Carr notes Cox Enterprises's $32 per share buyout bid for Cox represents a 16% premium to Friday's closing price. He notes the deal values Cox at about 9.0 times the estimated 2005 EBITDA, 19.6 times the estimated 2005 free cash flow, and $3,700 per subscriber. Given that Cox stock is down 20% year-to-date, is near 52-week low, he thinks the bid price is encouraging.

Carr believes the proposal benefits all cable companies, but in particular cites Comcast (with a sector-outperform rating) for its national presence. He also believes EchoStar (sector underperform) may benefit because its CEO, Charles Ergen, is apparently open to taking the company private.


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