Bresnan Communications Acquisition A Good, Although Geographically Remote Fit For CVC

Analysts at Wunderlich Securities reiterate their "buy" rating on Cablevision Systems Corp CVC. The target price for CVC is set to $33.50. CVC is close to announcing its all-cash purchase of Mountain State MSO Bresnan Communications for $1.36 billion. According to Wunderlich Securities, “The demographics also supported good advanced video product penetration for HD and DVRs. This could be a good albeit geographically remote fit for CVC - although the Street still fears trigger-happy Cablevision M&A activity.” “Other bidders included TPG Capital, BC Partners Ltd., Suddenlink Communications, and John Malone entity Ascent Media. Besides Providence, other private equity firms now owning Bresnan include Quadrangle Group and TD Capital. Lead banks Credit Suisse and UBS are reportedly committed to providing $1 bn in financing or up to six times AOCF contingent on 30% equity financing,” the analysts mention. Wunderlich adds, “The market still recalls the Dolan family's ill-starred VOOM satellite startup as well as the $650 mm Newday acquisition, but it is hard to fault management for a compelling horizontal cable deal even if it the asset is far removed from CVC's NYC Metro area wheelhouse.” More Analyst Ratings here