(Adds response from companies in paragraph 4, background in paragraph 6 & 7)
Feb 26 (Reuters) – Charter Communications is weighing a takeover of broadband service provider Altice USA , Bloomberg News reported on Monday, according to people familiar with the matter.
Shares of Altice USA were up 56% in afternoon trade, while those of Charter fell 2.8%.
It was unclear whether a formal approach has been made, the report said, adding that Charter could decide not to pursue a transaction.
Charter and Altice USA declined to comment on the report, when contacted by Reuters.
Altice USA has a market cap of about $1 billion and a debt pile of $25 billion, and if Charter were to buy the company outside of a debt restructuring, it would have to pay full value for that debt.
The potential takeover news comes weeks after Charter posted a surprise drop in broadband subscribers, as it grappled with promotional offerings from rivals in a highly saturated market.
Charter has been hit by stiff competition across broadband and wireless mobile and the decline of traditional television. (Reporting by Harshita Mary Varghese; Editing by Pooja Desai and Shailesh Kuber)
