CoBank filed a federal lawsuit Friday seeking to block Cable One's $480 million acquisition of a 55% stake in Mega Broadband Investments from private equity firm GTCR. The lender, which holds about $1.1 billion in secured credit from Cable One, argues the transfer would push the cable operator deeper into insolvency. According to the complaint, Cable One has previously disclosed the equity is worth a fraction of the agreed price, or even worthless, stating the company is "currently insolvent based on standard valuation methodologies." The lawsuit contends Cable One "is therefore aware and has confirmed to the investing public that the put price is grossly disproportionate to the value of the MBI equity." Cable One faces an Oct. 9 deadline to complete the purchase and is finalizing a $1.25 billion debt package to meet that commitment.
Representatives for Cable One, Co Bank, and GTCR did not immediately comment. The case, Co Bank ACB v Cable One, 26-cv-8935, is pending in the US District Court, Southern District of New York.
Source: Bloomberg Markets · Summarized by HeadlinesBriefing