Optimum Communications Inc (NYSE:OPTU) experienced a steep decline in its share price, dropping 30.7% on Wednesday, following the announcement by its wholly owned subsidiary that plans were in place to purchase 120 million shares at $2.50 per share in a tender offer.
CSC Investments II LLC provided preliminary results indicating that roughly 254.96 million shares were validly tendered at the $2.50 purchase price when the offer expired on June 30. Because the number of valid tenders exceeded the number of shares the subsidiary intended to buy by more than twofold, the company said it expected to apply a proration factor of approximately 47.1%.
Under the terms disclosed, CSC Investments II will accept 120 million shares, representing an aggregate purchase price of about $300 million, excluding fees and expenses. Given the oversubscription, the subsidiary will accept tenders on a pro rata basis, while odd lots will be accepted in full. The company also noted that conditional tenders were automatically withdrawn because the stated condition was not met.
The shares expected to be purchased amount to approximately 42.5% of Optimum Communications' issued and outstanding common stock as of June 30, 2026. Payment for accepted shares will be made in cash, subject to applicable withholding and without interest, and all other tendered shares will be returned promptly to the tendering holders.
Equiniti Trust Company LLC served as the depositary for the tender offer. Optimum stated that the final count of shares to be purchased will be announced after the guaranteed delivery period expires and the depositary completes its confirmation process.
Optimum Communications operates under the Optimum brand, providing broadband, video, mobile, proprietary content and advertising services to about 4.3 million residential and business customers across 21 states. The tender offer details and the market reaction underline investor focus on the companys capital allocation move and its immediate impact on share liquidity and pricing.
Key points:
- Subsidiary CSC Investments II LLC to buy 120 million shares at $2.50 each; aggregate cost roughly $300 million, excluding fees and expenses.
- Approximately 254.96 million shares were validly tendered, producing a proration factor of about 47.1% and pro rata acceptance of tenders, with odd lots accepted in full.
- The accepted shares represent roughly 42.5% of shares issued and outstanding as of June 30, 2026; payment will be cash, subject to withholding and without interest.
Risks and uncertainties:
- Final number of shares to be purchased remains subject to completion of the depositary's confirmation process and the expiration of the guaranteed delivery period.
- Conditional tenders were withdrawn because their condition was not satisfied, which could affect expected acceptance totals and the timing of settlements.
- Because payment for accepted shares is in cash, subject to withholding and without interest, tendering holders face immediate cash settlement terms and potential tax withholding implications.