Some cable/media analysts say Comcast's bid for AT&T's cable business last week is a strong move for Comcast, which they feel is a well-managed company with lots of experience running cable operations. Comcast's 6.74% notes of '11 widened 10-15 basis points on news of the bid, and the analysts say investors should buy Comcast paper on that weakness.
Ed Oppedisano, analyst at Deutsche Bank Securities, says the deal would increase Comcast's subscriber base to 22 million, giving it significantly more leverage in negotiating with content providers. He notes that news of the bid increased speculation about further industry consolidation: Cablevision 75Ž8% notes of '11 tightened 10 basis points on increased investor expectation that it will be snapped up by AOL Time Warner, whose ceo Gerald Levin has expressed interest in adding Cablevision's three million subscribers.
Marion Boucher Soper, analyst at Bear Stearns, expects the deal to go through because the list of potential bidders is short, and the merger will ultimately pass regulatory scrutiny. She doesn't believe the bid will ignite a wave of industry consolidation, however. "The cable industry is smart and studious. Where there's value in a deal, they're interested, but they aren't going to go wildly acquiring."