MERGERS & ACQUISITIONS
Cablevision Strikes $1.36 Billion Deal for Bresnan
7:48 a.m. | Updated Cablevision on Monday announced that it will acquire Bresnan Communications for $1.365 billion. It also announced a share buyback of up to $500 million.
6:21 p.m. | Updated Cablevision agreed on Sunday to pay more than $1.36 billion for Bresnan Communications, a cable services operator whose owners include the private equity firm Providence Equity Partners, people briefed on the matter told DealBook on Sunday.
The all-cash deal could be announced as soon as Monday, one of these people said, cautioning that the transaction has not yet been finalized and may still fall apart.
Cablevision appears to have beaten about seven bidders for Bresnan, which provides cable TV and Internet services in Colorado, Montana, Utah and Wyoming. If completed, the purchase would be one of the largest deals by Cablevision in years.
The deadline for offers was Tuesday. Other bidders in the auction included Suddenlink Communications and a company associated with John C. Malone, the telecom mogul, this person said.
Private equity firms have sought to exit their holdings over the past year, hoping to take advantage of improving markets and lock in gains for their investors. Exit opportunities have taken the form of initial public offerings and sales.
Providence led a group of investors, including the Quadrangle Group and Bresnan’s founder, William J. Bresnan, that bought majority control of Bresnan from Comcast for $525 million in 2003. Mr. Bresnan died last year.
Bresnan, which is based in Purchase, N.Y., was seen as an attractive acquisition target because of its high-speed Internet services and its presence in the low-competition Mountain states. Analysts have also praised Bresnan as a well-run company.
Providence is expected to make a return of two and a half times its original investment in Bresnan, according to a person briefed on the matter.
Providence had hired UBS and Credit Suisse to run the auction for Bresnan earlier this year. In the return of another once-popular deal tactic, the two banks had offered stapled financing — loans provided by a seller’s advisers — of up to six times Bresnan’s earnings before interest, taxes, depreciation and amortization, this person said.
In return, the winning bidder’s offer had to consist of at least 30 percent equity.
7:48 a.m. | Updated Cablevision has received debt commitments from its advisers,Citigroup and Bank of America Merrill Lynch. The company expects to acquire Bresnan through a newly formed subsidiary that will use about $1 billion of non-recourse debt and less than $400 million of equity.
The deal is expected to close late this year or early next year.
Cablevision was also advised by Guggenheim Securities, the investment firm whose executives include two top media deal-makers, former Bear Stearns chief executive Alan Schwartz and former JPMorgan Chase media banker Mark Van Lith, and the law firmSullivan & Cromwell.
Bresnan and Providence received legal advice from the law firms Weil, Gotshal & Manges and Holland & Hart.
– Michael J. de la Merced
