Optimum Communications (OPTU) shares jumped 81% in Monday trading after the company reported a series of transactions involving a newly formed unrestricted subsidiary, CSC Investments II, designed to raise and allocate about $500 million in capital.
The unit raised $300 million through a private placement of preferred units to third-party institutional investors. It also exchanged $200 million of preferred units for Optimum common stock held by controlling stockholder Next Alt at $2.50 apiece.
Optimum said the newly created subsidiary will hold the Optimum East Cable business and its 50.01% stake in Lightpath, as part of an internal reorganization aimed at making the assets financially and operationally independent from its parent, CSC Holdings.
Separately, CSC Investments II launched a cash tender offer for up to 120 million shares of Optimum class A common stock, or up to $300 million in value, at $2.50 per share. The company said the offer is not subject to a minimum condition or financing condition and will expire on June 30.
The unit said it expects to fund the tender offer with proceeds from the private placement and existing cash.
Price: $1.19, Change: $+0.53, Percent Change: +80.80%