DigitalBridge's Broadband Ambition: The Potential Acquisition of WideOpenWest

Cyrus ColeSunday, Mar 23, 2025 1:48 am ET
7min read

In the ever-evolving landscape of telecommunications and broadband services, a significant development is unfolding. A group led by , a prominent global digital infrastructure investment company, is pushing forward with a potential deal to acquire , Inc. (WOW), a leading broadband and cable services provider. This move, if successful, could reshape the industry dynamics and offer strategic advantages to DigitalBridge.



Strategic Advantages for DigitalBridge

The potential acquisition of WideOpenWest by DigitalBridge presents several strategic advantages. WideOpenWest provides broadband and cable services to nearly 2 million residential customers and businesses across 19 states in the Midwest and Southeast. This acquisition would significantly expand DigitalBridge's service footprint, allowing it to reach a larger customer base and increase its market share in the broadband industry.

Operational synergies are another key advantage. By acquiring WideOpenWest, DigitalBridge could achieve cost savings and increased efficiency in service delivery. This could lead to improved economies of scale and market competitiveness, positioning DigitalBridge as a stronger player in the telecommunications sector.

DigitalBridge has a history of investing in and acquiring strategic assets in the digital infrastructure space. For instance, it has invested in data centers, fiber-optic networks, and wireless infrastructure. Acquiring WideOpenWest would add a significant broadband network to its portfolio, enhancing its position in the telecommunications industry.

The broadband industry is expected to continue growing, driven by increasing demand for high-speed internet and digital services. By acquiring WideOpenWest, DigitalBridge would be well-positioned to capitalize on this growth, potentially leading to increased revenue and profitability.

Market Valuation and Implications

The current market valuation of WideOpenWest is $5.130 USD per share, as of March 21, 2025. This valuation is significantly higher than the proposed acquisition price of $4.80 per share, which was initially offered by DigitalBridge Investments and various Crestview entities in May 2024. The proposed acquisition price represented a 32% premium over the company's closing price on May 1, 2024, which was $3.65 per share. However, since then, the stock price has increased by 40.55%, reaching $5.130 USD per share.

p/e(6518)
price to book ratio(6518)
market cap(6518)
total revenue increase rate(6518)
net income increase rate(6518)
basic eps(6518)
total revenue increase rate ; net income increase rate ; basic eps(6518)
P/E(TTM)2025.03.21
Price to Book Ratio2025.03.21
Market Cap(USD)2025.03.21
Total Revenue YoY%2024.12.31
Net Income YoY%2024.12.31
Basic EPS(USD)2024.12.31
-6.64 4.14 1.16B206.58K 51.22-0.04
-3.12 1.63 1.16B 15.19K 32.50-0.26
-19.19 1.74916.65M 8.49K-64.14-0.17
8.4932.25 43.84M 5.59K433.460.06
-5.59-4.73 2.31B 5.33K 74.65-0.07
-1.30-1.71433.84M 4.25K 6.43-1.09
-0.66 0.90131.29M 3.68K 32.14-0.09
-17.37 6.67458.29M 2.70K 69.49-0.10
-2.43 0.80455.11M 2.03K-14.37-1.13
-0.00-0.01 1.06M 1.62K 10.52-39.57
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This discrepancy between the current market valuation and the proposed acquisition price has several implications for shareholders and potential investors. The current market valuation suggests that shareholders may perceive the company's intrinsic value to be higher than the proposed acquisition price. This could lead to resistance from shareholders who believe the offer undervalues the company.

The higher market valuation could attract other potential acquirers who might be willing to offer a higher price, potentially leading to a bidding war. This would be beneficial for shareholders as it could result in a higher acquisition price.

Investor sentiment appears positive towards WideOpenWest. The increase in stock price indicates that investors are optimistic about the company's future prospects, which could influence their decision to hold or sell their shares.

However, the significant gap between the current market valuation and the proposed acquisition price increases the risk that the deal may not go through. If the parties cannot agree on a price that satisfies both the acquirers and the shareholders, the acquisition may fall through.

Industry Impact

The potential acquisition of WideOpenWest by DigitalBridge could have a significant impact on the broader telecommunications and broadband industry. It could lead to increased competition, potentially driving innovation and improved services for consumers. Additionally, it could influence other players in the industry to pursue similar acquisitions or strategic partnerships to remain competitive.

The acquisition could also lead to operational synergies and cost savings, which could be passed on to consumers in the form of lower prices or improved services. This could benefit both consumers and the industry as a whole.

Conclusion

The potential acquisition of WideOpenWest by DigitalBridge presents several strategic advantages, including an expanded service footprint, operational synergies, and growth potential. It could also have a significant impact on the broader telecommunications and broadband industry, driving competition and innovation. However, the current market valuation of WideOpenWest is higher than the proposed acquisition price, which has implications for shareholders and potential investors. It suggests that shareholders may perceive the company's intrinsic value to be higher than the offer, potentially leading to resistance or a bidding war. However, it also increases the risk of the deal failing if the parties cannot agree on a price.