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Cox to buy TCA for $4B
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May 12, 1999: 7:42 a.m. ET
Takeover would make cable operator nation's 4th largest with 5M subscribers
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NEW YORK (CNNfn) - Cox Communcations said Wednesday it will buy Texas-based TCA Cable TV Inc. for $4 billion in cash and stock, a move that further picks up the pace of consolidation in the cable industry.
Atlanta-based Cox (COX) said the deal is worth $63.89 per share. TCA (TCAT) stock closed at 52-1/16, down 1-1/8.
Cox said it will pay $31.25 in cash and distribute 0.3709 share for each TCA share, or will give TCA shareholders $62.50 in cash per TCA share or 0.7418 share of Cox stock for each TCA share. The value of the deal also includes Cox's assumption of $736 million in debt.
Under the deal, Cox will pay about $4,115 per subscriber. That compares with the $4,600 per-subscriber paid by AT&T (T) in its $58 billion takeover of MediaOne Group (UMG).
The TCA deal will add about 883,000 subscribers to Cox's customer base. Together with the previously announced acquisition of the cable operations of Media General Inc. of Virginia, Cox will serve a total of 5 million subscribers and become the 5th largest cable operator in the country, the company said. Cox is currently tied for sixth place with Adelphia Communications (ADLAC) in the number of cable subscribers.
Both the TCA and Media General deals are expected to close sometime in the fourth quarter.
Cox said the deal will help shore up its share in smaller markets. TCA, which is based in Tyler, Texas, serves customers throughout Texas, Arkansas, Louisiana and four other states in the south-central United States.
"TCA represents an ideal platform for further middle market consolidation, and will become the cornerstone of our plans to offer advanced services in middle-market communities," Cox president and CEO Jim Robbins said in a statement.
The deal already has been approved by the boards of both companies. It is subject to approval by TCA shareholders and regulators.
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