Cheddar News Parent Altice USA In Talks To Offload News Service To Private Equity: CNBC

Zinger Key Points
  • Altice USA in talks to sell Cheddar News to Regent, with no cash exchange; potential future earnings up to $50 million.
  • Altice USA's stock falls amid Cheddar sale discussions and a 3.2% revenue decline in Q3, despite EPS beating consensus.

Altice USA, Inc ATUS stock is trading lower Monday amid reports of the company discussing selling the financial news streaming service Cheddar News to L.A.-based private equity firm Regent LP.

Altice USA and Regent are discussing a potential transaction for Cheddar, where no initial cash exchange would occur. Instead, Altice USA would participate in Cheddar's future performance through an "earn-out" structure. 

If Cheddar achieves specific performance targets, Altice USA could receive future proceeds approximately amounting to $50 million, based on internal projections, CNBC reports.

Cheddar, a business news streaming service targeting millennials, was founded in 2016 by Jon Steinberg. Altice USA acquired it for $200 million in 2019.

Dexter Goei, then CEO of Altice USA, praised Steinberg's ability to grow Cheddar and its advertising revenue. Steinberg remained with Altice USA post-acquisition before leaving in early 2022, and Goei stepped down as CEO later that year.

Since the acquisition, Altice USA, the fourth-largest U.S. cable provider, has experienced a significant stock price drop, nearly 60% this year, amid profit and revenue declines due to losses in high-speed broadband. 

The company had also considered selling its cable asset, Suddenlink, but abandoned these plans in late 2022.

In November, Altice USA reported a third-quarter revenue decline of 3.2% year-on-year to $2.32 billion, beating the consensus of $2.29 billion. EPS of $0.15 beat the consensus of $0.06.

Price Action: ATUS shares traded lower by 4.65% at $2.05 on the last check Monday.

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