Patrick Drahi, the billionaire owner of European telecoms group Altice, has admitted that he did not bid for Time Warner Cable (TWC) because his company lacked management resources to digest such a big deal in a market it had only recently entered. After agreeing to buy regional cableco Suddenlink earlier this month in a surprise USD9.1 billion deal, Drahi flew to New York to meet with TWC CEO Rob Marcus for takeover talks. However, despite lining up a number of international banks to finance the deal, Altice opted not to bid, clearing the way for Charter Communications to strike a deal.
Speaking to a French parliamentary hearing this week, Drahi noted that the purchase of Suddenlink (the seventh largest US cableco by subscribers) was a ‘modest’ way to test the water in the US cable market, with Reuters quoting him as saying: ‘Time is on our side … The two [market] leaders, Comcast and Charter, will not be able to buy anything else because of their size, so we will have an open boulevard ahead of us … If I buy five small operators, I can be as big as TWC.’ Drahi has reportedly set a goal for Altice to eventually earn half of its revenue in the US, aiming to diversify risk rather than bet all on Europe.
TeleGeography notes that potential acquisition targets for Altice Group include privately held Cox Communications, the fourth-largest US cableco (subscriber figures not disclosed), fifth-largest cableco Cablevision Systems (2.76 million broadband subscribers as of end-2014), eighth largest cableco Mediacom (1.01 million) and ninth largest cableco Wide Open West (WOW!, 728,000). Notable market minnows include Cable ONE (488,454), Atlantic Broadband and RCN Telecom.