Charter CEO says ‘generally like cable M&A,’ bar is ‘high’

Christopher Winfrey, CEO of Charter (CHTR), was asked during a presentation at the Morgan Stanley Technology, Media and Telecom Conference about the Bloomberg story from a few weeks ago about a potential interest in Altice USA (ATUS) and replied, according to a transcript: “So it’s our policy not to speculate on or to comment on speculation around M&A. That hasn’t hasn’t changed. But even as recent as late last year, I was pretty clear that we stick to our guns on M&A in a space where we think we can generate value for shareholders, a space that we know well. So that typically tends to be cable. So we do generally like cable M&A, but it has to be in a way that generates value for shareholders. And what I said back in November was when you think about all the cable M&A that we’ve done over the years, some of those acquisitions required us to reprice the product in the marketplace, which is a negative synergy. Some of those acquisitions also required us to invest more in the operating cost to get the service structure back. And that’s also a dis-synergy and sometimes capital as well. But the M&A that we’ve completed in the past always had the opportunity that if you made those investments, you had the opportunity to actually grow the target asset at a faster pace. And depending on that ratio of how much dissynergies are there versus the synergies and what’s your opportunity to grow synergies determines the attractiveness for shareholders. And sometimes, that means that the value of the company is worth its equity. Sometimes it means it’s worth a premium to the equity. And sometimes it means it’s not worth the principal debt. And so all those things factor into how we think about it. I would tell you that in this market climate, one, the bar for M&A has always been high. And in this market climate, it’s probably higher. And we have enough to do already with all the different activities that we’ve got, but that’s just a general statement. I’m not talking about any particular situation.”