Charter reportedly mulling acquisition of Altice USA

US cable giant Charter Communications is reportedly mulling a bid to acquire Altice USA.

According to Bloomberg, citing unnamed sources, it is not yet clear if a formal approach has been made. CNBC later reported that no approach had yet been made, citing an unnamed source.

Nevertheless, Altice USA’s shares jumped by over 60% on the news, closing up 36% on the day, with Charter’s share price dipping slightly.

Altice USA has just under five million customers. The company was put together through a series of acquisitions by Patrick Drahi’s Altice that included US operators Suddenlink and Cablevision, with services subsequently rebranded as Optimum.

Charter, which operates the Spectrum brand, has around 32 million customers, including about 30 million residential customers.

Cutting the cord

Both operators have suffered from the ongoing propensity of US consumers to cut the cord. Charter reported the loss of 61,000 residential and business customers in Q4, including the loss of 248,000 TV service relationships. Altice USA lost 28,000 residential customers and about 800 business customers.

Both side are seeking to grow their respective broadband and wireless footprints.

Charter is expanding its broadband network into rural areas and is more broadly upgrading its HFC network, leaning on DOCSIS upgrades except in new-build areas.

Altice USA has meanwhile embarked on an expensive all-fibre upgrade of its networks.

Drahi, struggling to reduce the heavy debt load of his European operations through divesting key assets, retains an ownership stake of about 7.3% of Altice USA through his Next Private BV vehicle.