Sources say Altice USA targeted private equity infrastructure funds in early talks to sell Suddenlink

Dexter Goey, CEO of cable and mobile telecommunications company Altice.

Benoit Tessier | Reuters

Altice USAThe fourth-largest US cable company, Suddenlink is targeting infrastructure private equity firms as potential buyers at the start of the sale, people familiar with the matter say.

Altice USA CEO Dexter Goey confirmed Wednesday the company has begun the process of selling Suddenlink, a cable provider that offers service in 17 states including Texas, Louisiana and West Virginia. Altice USA acquired Suddenlink for $9.1 billion in 2015. bloomberg first reported negotiations for the sale.

Altice USA financial advisers have contacted more than a dozen private equity funds in hopes of finding a buyer, the people said, who asked not to be named because the talks are private. Discussions with Charterthe second-largest U.S. cable company and a potential buyer given the lack of a geographic presence in many of the places where Suddenlink is served, people say.

An Altice USA spokesperson declined to comment on potential buyers.

The valuation of Comcast and Charter’s publicly traded cable assets is down about 25% or more this year. as broadband internet growth has slowed. Altice USA is interested in selling Suddenlink so it can focus on managing the assets formerly called Cablevision, which are in the process of moving to fiber, a high-speed network that can better compete with growing competition from wireless companies. On Wednesday, Goei said that by the end of 2024, these assets will be “almost entirely fibrous.”

According to people, Altice USA does not have Suddenlink’s set price target in mind. People say the Suddenlink sale talks are still premature and a deal is not guaranteed.

Some infrastructure funds specialize in transitioning from cable to fiber, so Suddenlink could be an attractive acquisition for a fund that wants to invest in an asset that it can sell later.

Blackstone Infrastructure Partners, ECWT, and Stonepeak are among the funds that have acquired cable or fiber networks in recent years. stonepeak paid over $8 billion or Astound Communications, the sixth largest cable TV provider in the US, in 2020.

WideOpenWestern halls

Infrastructure private equity funds are also interested in acquiring WideOpenWest, which offers cable television services in regions of the country that already have another cable operator licensed to provide Internet, telephony and television services. In May, Bloomberg reported that Morgan Stanley The infrastructure investment division was interested in buying the so-called cable company, whichwith a market valuation of $1.7 billion.

If a trade on WideOpenWest or WOW goes first, Altice USA may argue that Suddenlink should trade at a higher price. Suddenlink is the only cable provider in about 70% of the markets it serves, making it more valuable to a potential buyer who wants more pricing and fewer competitors.

Disclosure: Comcast is the parent company of NBCUniversal, which owns CNBC.

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