Cablevision to sell Optimum West to Charter
Charter Communications Inc. agreed to buy Cablevision Systems Corp.'s Optimum West for $1.63 billion in cash, gaining a regional cable provider in the western United States.
Charter won out over peers such as Time Warner Cable Inc. and Suddenlink Communications, which also made offers for the business, according to people close to the situation.
Charter chief executive Tom Rutledge is also familiar with Optimum West, which provides cable services to states such as Colorado and Utah. He pushed Cablevision to buy the business in 2010 when he was Cablevision's chief operating officer.
"Charter is an educated buyer, because the CEO purchased the property for Cablevision, but in the near term this is more positive for Cablevision," said Frank Louthan, an analyst at Raymond James & Co. in Atlanta. "This is a transaction where there aren't a lot of synergies, because Charter is acquiring what became a well-run property." Louthan rates Cablevision's stock outperform and Charter's market perform.
Shares of Cablevision, which is based in Bethpage, jumped 5.57 percent to close at $15.17 in trading in New York yesterday, its largest one-day gain since July 19. Cablevision owns Newsday. Shares of Charter, which is based in St. Louis, fell 0.52 percent to $80.63.
Cablevision bought the unit, previously known as Bresnan Broadband Holdings Llc, more than two years ago from Providence Equity Partners Inc. for $1.37 billion.