Cable One, Inc. (NYSE:CABO) stock traded lower on Monday after the company updated investors on financing for its pending purchase of Mega Broadband Investments Holdings LLC.
Cable One Lines Up $2.45 Billion Financing Plan
Cable One said it has agreed in principle on material terms with GTCR, existing lenders and private lending institutions on transactions expected to address $2.45 billion of obligations and near-term debt maturities.
The proposed refinancing would extend and reduce its revolving credit facility, settle the Mega Broadband put, and fully repay its B-4 term loan.
Cable One said the transactions would also provide liquidity for business investment and its long-term strategic plan.
However, no definitive financing agreements have been signed, and the company said there is no guarantee the transactions will be completed.
Court Order Blocks Mega Broadband Deal
The financing remains contingent on resolving a temporary restraining order that prevents Cable One from completing the acquisition.
The U.S. District Court for the Southern District of New York issued the order on Oct. 9 after CoBank, a lender under Cable One’s credit agreement, sued to block the deal.
CoBank alleges the acquisition payment would constitute a constructive fraudulent transfer. Cable One disputes the claim and said it is not required to close while the legal restraint remains in place.
Cable One agreed in January to acquire the remaining 55% of Mega Broadband Investments it did not already own, but the transaction has since become tied to a broader refinancing effort and a legal challenge from lender CoBank.
Analyst Outlook
The stock carries a Hold consensus rating with an average price target of $56.33.
Recent analyst actions include BNP Paribas lowering its target to $13 with a Neutral rating on Sept. 29, TD Cowen lowering its target to $86 with a Hold rating on Aug. 7, and BNP Paribas upgrading the stock to Neutral while lowering its target to $40 on July 14.
CABO Stock Price Activity: Cable One shares were down 2.33% at $10.89 at the time of publication on Monday, according to Benzinga Pro data.
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