Final bids for Insight Communications are due next week and the field, once chock full of strategic and financial players has been pared down to three final participants - Mediacom Communications, Cablevision Systems and WideOpenWest - sources familiar with the auction said.
Insight, which has about 693,000 basic video subscribers in Indiana, Kentucky and Illinois, went on the block in March and is reportedly asking for as much as $3.5 billion to $4 billion. Bank of America Merrill Lynch and UBS AG are running the auction for Insight.
According to sources familiar with the matter, several bidders dropped out of the running in past weeks, including Suddenlink Communications, Charter Communications and several private equity funds. The asking price - estimated to be between 10 times to 11 times forward-looking cash flow - has forced some potential bidders to the sidelines. Back in May, Time Warner Cable, considered by some to be the most logical buyer for Insight, reportedly did not participate in the bidding mainly because of the high multiple. Time Warner Cable stock is currently trading at about 6.5 times forward looking cash flow. It recently purchased 70,000 subscribers from NewWave Communications for under 8 times cash flow, which some observers said sent a signal to Insight's owners.
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