Thread regarding Altice USA (Cablevision) layoffs

Why would a company acquire the debt of the other company to acquire it

Acquiring the debt of another company to acquire them can be a strategic move for several reasons:

  1. Lower purchase price: Acquiring debt may allow the acquiring company to negotiate a lower purchase price for the target company, as the target's existing debt can be considered a liability.
  1. Access to assets: The acquiring company might be interested in specific assets or resources of the target company. Acquiring their debt can be a means to gain control of those assets without purchasing the entire company outright.
  1. Synergy and cost-saving: By acquiring the target company's debt, the acquiring company may be able to achieve operational synergies and cost savings, leading to increased efficiency and profitability.
  1. Market consolidation: Acquiring the debt of another company can be part of a broader strategy to consolidate a market, increase market share, and gain a competitive advantage.
  1. Strategic positioning: It may be a strategic move to block other potential acquirers from taking over the target company, giving the acquiring company an opportunity to negotiate better terms.

However, acquiring debt to acquire a company also comes with risks, such as taking on the target company's financial liabilities and obligations. It's essential for the acquiring company to conduct thorough due diligence before proceeding with such a transaction.

They had no intentions of paying the debt

by Anonymous
| 931 views | | 3 replies (last August 4, 2023) | Reply
Post ID: @OP+1nVcmoHZ
Comment! It's anonymous!

3 replies (most recent on top)

Such Doom and Gloom! 🙁😂

by Anonymous
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Post ID: @1hxb+1nVcmoHZ

Cable TV companies, like other utilities (power, telephone), usually carry very heavy debt loads. One main reason is that banks and lenders are usually happy to extend them sizable credit lines as cable companies and utilities have great cash flows: there is a steady inflow of cash each month from customers/subscribers that provides some assurance of the business’s ability to pay their debt. As a result it would be very unlikely that any cable company could be sold without the assumption of some or all of that debt. There are times when a selling business does pay off the debt at the time of the sale but it would usually be from funds earned through the sale-the same day that the proceeds of the sale flow from the buyer to the seller, the amount of the outstanding debt is paid directly to the debtors. Whether Altice ever “intended” to pay off the debt makes no difference. The new buyer is as legally responsible to pay off the debt as the seller was and would be subject to the same legal consequences of non-payment.

by Anonymous
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Post ID: @1ijf+1nVcmoHZ

I absolutely agree, they had no intention of paying the debt. I don’t think anyone outside the inner circle truly knows what the intentions were then or are today. I do know from everything I have seen since these people have acquired CV and SL that they have no integrity whatsoever. I know a lot of people like to bash corporate America but these people truly are everything wrong with “corporate America.” The Sr Executive leadership of the companies that were acquired demonstrated you can take care of the people running your company and still be profitable. I’m convinced these people are about to loose everything they have acquired and it will be the employees who will be out in the cold when the dust settles. This is all conjecture but I see this company being broken up in the not so distant future among the top 3 MSO’s because Altice simply cannot operate under the crushing debt it currently has and the debt that is coming. It has been a disaster from day one and it has only gotten worse with each passing year.

by Anonymous
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Post ID: @ryt+1nVcmoHZ

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