Charter Communications considers takeover of Altice USA

Charter Communications is weighing a takeover of broadband service provider Altice USA Bloomberg News reported on Monday, according to people familiar with the matter.

Shares of Altice USA were up 56% in afternoon trade, while those of Charter fell 2.8%.

It was unclear whether a formal approach has been made, the report said, adding that Charter could decide not to pursue a transaction.

Charter and Altice USA declined to comment on the report, when contacted by Reuters.

Altice USA has a market cap of about $1 billion and a debt pile of $25 billion, and if Charter were to buy the company outside of a debt restructuring, it would have to pay full value for that debt.

The potential takeover news comes weeks after Charter posted a surprise drop in broadband subscribers, as it grappled with promotional offerings from rivals in a highly saturated market.

Charter has been hit by stiff competition across broadband and wireless mobile and the decline of traditional television. Reuters