Confirming rumors (and investors’ fears) Cablevision announced Monday morning that it had won the bidding for Bresnan Communications, paying $1.365 for the cable MSO operating in Western small markets. Cablevision also announced plans to buy back a half billion dollars of its own stock.
As previously reported, Wall Street was aghast at the idea of Cablevision, whose cable systems are all clustered around New York City, spending big to buy Bresnan, whose systems are all in Colorado, Montana, Wyoming and Utah.
“We still don’t understand the strategy behind this deal, but it does solidify CVS’s [Cablevision’s] focus on the core business,” wrote Wells Fargo Securities analyst Marci Ryvicker in a testy note to clients early Monday.
The good side, according to Ryvicker, is that Cablevision appears to be listening to investors by announcing the share buyback plan. The company, whose voting power is controlled by the Dolan family, has never before had a share buyback. Ryvicker, however, says it should be bigger and notes that “it needs to be utilized – not just authorized.
RBR-TVBR observation: Cablevision is conducting a Wall Street conference call late Monday morning. It could be a hot one!