WOW in exclusive M&A talks with Morgan Stanley infrastructure unit – report

Shares in WideOpenWest (WOW) popped more than 10% Monday after a report appeared that Morgan Stanley Infrastructure Partners (MSIP) is in "exclusive talks" to acquire the Colorado-based competitive cable operator.

A deal hasn't been finalized yet and it's possible that the talks could end without a pact, Bloomberg reported, noting that Crestview Partners, which has a 36% stake in WOW, is the operator's largest shareholder.

WideOpenWest "does not comment on rumors and speculation," a company official told Light Reading via email when asked about the report.

Figure 1: WOW ended Q1 2022 with 535,000 broadband subs.
(Source: tofino/Alamy Stock Photo)

Founded in 2006, MSIP possesses a portfolio that includes FastFiber, a fiber wholesale operator in Portugal, and Tele Columbus, a network operator that reaches more than 3 million homes in Germany. In 2020, MSIP inked a deal to acquire 49.99% of Lightpath, a fiber-based business services unit that remains majority-owned by Altice USA.

Word of M&A talks between WOW and MSIP arrives nearly a month after Bloomberg reported that WOW was exploring strategic options, including a possible sale.

That news surfaced amid big changes at WideOpenWest. After selling off a handful of systems to Atlantic Broadband (now Breezeline) and Astound Broadband for a combined $1.8 billion, WOW has embarked on a plan to build fiber-to-the-premises (FTTP) networks in greenfield areas with relatively low levels of competitive intensity.

Last week, WOW announced that it is targeting FTTP network buildouts to 400,000 homes passed in greenfield areas by 2027, effectively doubling its original commitment. WOW, which had already been targeting network builds to parts of Florida and South Carolina, is now poised to increase its footprint by 21% under its revised greenfield expansion plan.

Figure 2: WOW's revised greenfield fiber buildout stands to expand its total service footprint by 21%.
Click here for a larger version of this image.
(Source: WideOpenWest Q1 2022 earnings presentation)

WOW is also in the process of launching a mobile service developed in partnership with Reach Mobile. Speaking last week on WOW's Q1 2022 earnings call, company CEO Teresa Elder said the plan is to launch the new mobile service in one of its southern markets later this month. Market candidates for that initial launch include Charleston, South Carolina; Augusta, Newnan and Columbus, Georgia; Pinellas and Panama City, Florida; and Huntsville, Montgomery, Auburn and Dothan, Alabama.

WOW added 3,300 high-speed Internet subs in Q1 2022, ending the period with 535,000. WOW expects to add 1,000 to 2,000 broadband customers in the second quarter of 2022, and 14,000 to 17,000 for full-year 2022.

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— Jeff Baumgartner, Senior Editor, Light Reading