Altice USA: Why It Will Not Be Acquired By Comcast
(Preview) Company Update (ATUS US) (Neutral)
Summary
ATUS stock has risen 9.7% since rumors of takeover interest from Comcast. We do not believe a deal will happen.
With its $26bn+ current Enterprise Value, ATUS may be too large to acquire, and any deal will push Comcast leverage above target.
ATUS has deep problems that are difficult to fix, and synergies would be limited by differences in technology and wireless arrangements.
A new team has just started, the controlling shareholder is not motivated to sell and ATUS had already failed to sell part of itself in 2022.
We reiterate our Holding rating on ATUS. Avoid.
Introduction
Altice USA stock has risen 9.7% since last Tuesday (Feb. 28) when media reports started to speculate about potential takeover interest from Comcast. ATUS shares have lost 62% in the past year, and has lost 78% since we downgraded our rating to Hold, suggesting it should be avoided, in 2021.
We do not believe ATUS will be acquired by Comcast in the foreseeable future. With an Enterprise Value exceeding $26bn, ATUS …