With its valuation topping $4.8 billion, analysts are urging Cablevision Systems Corp. (NYSE: CVC) to take advantage of its surge in value and consider selling. Macquarie Group analyst Amy Yong told Bloomberg that the company is at a perfect place to sell but it must act quickly.
Cablevision is much smaller than its peers Time Warner Cable (NYSE: TWC) and Charter Communications (Nasdaq: CHTR), which puts the company at a disadvantage if it misses out on the wave of consolidation expected to occur as cable operators seek to gain more bargaining power with channel owners. Charter, backed by Liberty Media (Nasdaq: LMCA) Chairman John Malone, is reportedly considering a merger with Time Warner Cable or Cox Communications, according to people familiar with the matter.
GAMCO Investors has said a sale of Cablevision is likely, and the investment group believes the company is attractive to either Charter or Time Warner Cable. Google is another potential buyer as it is looking to expand its TV and broadband businesses.
Cablevision's leadership has indicated it may be interested in a deal. On the second quarter earnings call, CEO Jim Dolan responded to questions about a potential merger or sell of the company by saying: "You never say never."
Last month, Malone told Reuters he sees a potential for Time Warner Cable to acquire other cable MSOs, and he also suggested a scenario in which a Liberty-backed Charter Communications could acquire the nation's second-largest cable MSO.
- see this Bloomberg article
Cable stocks unfazed by NASDAQ outage
Comcast CFO says M&A possible, but not at debt levels John Malone is comfortable with
Malone floats scenarios for Time Warner Cable – Charter merger
Report: TW Cable rebuffed Charter's initial offer, but Liberty's Malone is still mulling options
Rumor mill: Charter may be eyeing Time Warner Cable as an acquisition target