WideOpenWest shares were up more than 12% Thursday after a report in Bloomberg News claimed the Denver-based overbuilder was “exploring options” including a sale.
According to the Bloomberg report, people familiar with the matter say WOW has hired an adviser to drum up interest in the company.
WOW spokesperson Jamie Mayer declined comment, adding that the company does not comment on rumor and speculation.
WOW shares closed at $20.02 each on Thursday, up 12.5% or $2.23 per share, as investors scrambled to take advantage of a possible deal. The stock was up another 3% in after-hours trading April 7 to $20.75 each.
Despite Thursday’s rise, WOW stock is still down about 7% for the year.
Based in Denver, WOW has about 532,900 subscribers and last year sold systems in five markets to Astound Broadband and Atlantic Broadband (now Breezeline) for a combined $1.786 billion. WOW's largest individual shareholder is Crestview Partners, the New York-based private equity fund that counts cable pioneer Jeffrey Marcus as its vice chairman. Marcus retired as a partner at Crestview in 2019, but is still WOW's chairman of the board. The company CEO is long-time telecom executive Teresa Elder, who joined WOW in 2017.
Full year 2021 revenue was down 1% to $725.7 million and cash flow rose 9% to $261.6 million. WOW ended 2021 with 532,900 voice, video and data subscribers, up 10,000 from the prior year. The company operates in 14 markets in Michigan, Alabama, Tennessee, South Carolina, Florida and Georgia.
Deal multiples have risen in the past few years, with Stonepeak Infrastructure Partners’ $8.1 billion purchase of Astound Broadband one of the highest — an estimated 14.1 times cash flow. Given that multiple, WOW could be worth as much as $3.65 billion, but even at more traditional multiples of 7 times to 10 times cash flow, the company could fetch between $1.8 billion and $2.6 billion.
Possible suitors could range from private equity and other financial players to strategic buyers like Altice USA (whose bid to buy Atlantic Broadband in 2020 was rebuffed by that operator’s Canadian parent); Astound Broadband (which purchased WOW’s Anne Arundel, Maryland; Chicago; and Evansville, Indiana systems last year for $661 million); and Breezeline (which purchased WOW’s Cleveland and Columbus, Ohio systems last year for $1.125 billion). ■
