The telecommunications market was hit with another consolidation whisper on Wednesday following a CNBC report that French telecom giant Altice is working on an offer to buy U.S.-based cable company Charter Communications.
Altice, and its U.S. cable subsidiary, Altice USA, have an offer in the works but have not yet brought a proposal to the table for Charter's board, according to the report, which cited people close to the situation.
Charter has been in the middle of much consolidation speculation this summer. U.S.-based wireless carrier Sprint, which is owned by Japan's SoftBank Group, proposed a full merger in July with Charter in which SoftBank Group would gain control over the combined company. Two days later, however, Charter declined the offer.
Charter did not return CRN's request to comment on the reported proposals when reached for comment.
In 2016, Charter closed two major acquisitions and became the second-largest U.S. cable provider behind Philadelphia-based Comcast. The cable provider bought New York-based Time Warner Cable for $56 billion, as well as Syracuse, N.Y.-based Bright House Networks for $10.4 billion. Combined, Charter today calls its cable TV and broadband services "Spectrum."
Charter, based in Stamford, Conn., is currently $60 billion in debt. A potential buyout of the company could reach or exceed $500 a share, representing an enterprise value of nearly $200 billion, according to Wall Street estimates. It is unclear whether Altice USA, which has a smaller enterprise value estimated at $22 billion, would be able to craft an offer that would appeal to Charter and its management, which includes its largest shareholder Liberty Media. Liberty Media controls 25 percent of Charter's voting shares.
Altice USA had its IPO on the New York stock exchange in June, which Wall Street analysts believed signaled plans to expand in the U.S. by way of public stock that could be used as currency for acquisitions.
In addition to Altice and SoftBank, Verizon was reportedly interested in combining with Charter. In January, The Washington Post reported that the Basking Ridge, N.J.-based carrier's CEO Lowell McAdam made a "preliminary approach" with a deal for Charter, citing unnamed sources familiar with the matter.