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Is Charter Communications Mulling to Buy Cox Communications?

According to a recent report by the New York Post , Charter Communications Inc.CHTR is considering bidding for privately held Cox Communications Inc. Notably, these two companies are the second and third largest cable MSOs (multi service operator), respectively, in the U.S. However, neither company has confirmed this news.

Last year, Charter Communications completed two major acquisitions of Time Warner Cable and BrightHouse Network for a combined $67.1 billion net of debt. These two deals have benefitted the cable MSO in terms of geographic expansion and operating cost synergies. This, in turn, will boost its bottom line and free cash flow. However, the company is yet to complete the integration process.

Following this acquisition, the new Spectrum TV app came up which is aimed at uniting the viewing experience of these two acquired companies on a single podium. It is worth noting that, the company has taken the initiative to upgrade its multiscreen app and launch an authenticated in-home and TV Everywhere app called Spectrum TV. The new Spectrum TV app also supports legacy Charter Communications customers as well as those who came on board via its acquisitions of Time Warner Cable and BrightHouse Network.

Meanwhile, on May 8, 2017, Charter Communications and Comcast Corp. CMCSA , the largest cable MSO in the U.S., agreed to jointly work on their wireless services businesses. They aim to better explore their opportunities, and accelerate and enhance each other's ability to participate in the national wireless marketplace. For this much-hyped wireless venture, both companies have already inked a Mobile Virtual Network Operator (MVNO) agreement with U.S. telecom behemoth Verizon Communications Inc. VZ to utilize its wireless network.

In Feb 2017, Charter Communications announced that it will be launching experimental field trials of the upcoming 5G wireless network. Notably, these trials come on the back of spectrum test licenses granted to the company by the Federal Communications Commission. The company plans to offer wireless service in 2018.

Importantly, Charter Communications recently rejected a $100 billion takeover offer from Verizon. In this respect, it is worth mentioning that U.S. telecom giant AT&T Inc. T has become a major pay-TV operator after its acquisition of satellite TV service provider DIRECTV.

Price Performance of Charter Communications

Year to date the stock price of Charter Communications returned 16.04%, outperforming the Zacks categorized Cable TV industry's gain of 15.93%. At present, the cable TV industry is facing a massive cord-cutting threat and Charter Communications is no exception. We believe that this is the primary reason behind the stock currently carrying a Zacks Rank #3 (Hold). You can see the complete list of today's Zacks #1 Rank (Strong Buy) stocks here .

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The views and opinions expressed herein are the views and opinions of the author and do not necessarily reflect those of Nasdaq, Inc.


The views and opinions expressed herein are the views and opinions of the author and do not necessarily reflect those of Nasdaq, Inc.

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