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Cablevision Buying Bresnan For $1.365 Billion

Price Pegged At 8.3 Multiple Of Cash Flow

by Kent Gibbons -- Multichannel News, 6/14/2010 8:22:30 AM

Cablevision Systems has won the auction for Bresnan Communications, agreeing to buy the cable operator's 300,000-plus subscribers from majority owner Providence Equity Partners for $1.365 billion.

The price was estimated at 8.3 times current Bresnan cash flow of $165 million, which Bernstein Research termed a steep premium to current market multiples.

Bresnan operates in Colorado, Montana, Wyoming and Utah and passes more than 630,000 homes.

Cablevision also announced its board of directors approved a $500 million stock repurchase program, which Bernstein said investors would welcome but that investors will be "frustrated" that Cablevision didn't opt to buy more of its own stock at a current trading multiple of 6.3 times.

Other bidders were reported to include Liberty Media. The spirited auction was overseen by UBS and Credit Suisse.

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