Lender Sues to Block Cable One's Mega Broadband Deal, Stock Plunges 35%
CABO is trading near its 52-week low of $9.88 (1.6% above the low) on elevated volume (3.2× avg).
Summary
CoBank, which holds about $1.1 billion in secured credit issued by Cable One, filed a lawsuit in federal court seeking an emergency restraining order to block the company from transferring about $480 million for its purchase of a 55% stake in Mega Broadband from GTCR. The lender argues the transfer would push Cable One deeper into insolvency and leave its remaining assets unreasonably small given its large debts. Cable One faces a Friday deadline to complete the purchase, and the stock plunged 35% on the report. This follows a series of distress signals: a $1.16 billion Q2 net loss, a $700 million revolver draw, and an extension of the acquisition closing date to October 9. The lawsuit directly threatens the deal's completion and raises the risk of a covenant breach or forced restructuring.
At the time of this announcement, CABO was trading at $10.04 on NYSE in the Trade & Services sector, with a market capitalization of approximately $57M. The 52-week trading range was $9.88 to $172.06. This news item was assessed with negative market sentiment and an importance score of 9 out of 10. Source: Seeking Alpha.