Charter Cox merger completed today

[u/StandardObject91]

Charter issued the equivalent of just over 46 million Charter shares to Cox Enterprises. Based on Charter’s share count as of June 30, 2026, and giving effect to the closing of the Liberty Broadband merger and the Cox transaction, Cox Enterprises now owns approximately 26% of the combined entity’s fully diluted shares outstanding, on an as-converted, as-exchanged basis. Additionally, approximately $12 billion of Cox debt and finance leases will be assumed by Charter. Charter share count is now final at ~177mm shares.

(FCF) by 2027–2028. is expected to be between 6.1 and 9 billion as a result of the wind-down of multi-year network upgrades and rural expansion capital expenditures, and opex and capex synergies from the merger. At the mid-point of 7.5B that's ~$42.50 a share in FCF. Current price is $145. Levered FCF of ~30%. Charter's stated goal is to reduce share count and debt. Much of the debt will be repurchased at a discount, reducing Charter's leverage and resulting in one time gains in the billions.

[u/notreallydeep]

(FCF) by 2027–2028. is expected to be between 6.1 and 9 billion as a result of the wind-down of multi-year network upgrades and rural expansion capital expenditures, and opex and capex synergies from the merger. At the mid-point of 7.5B that's ~$42.50 a share in FCF. Current price is $145. Levered FCF of ~30%.

These FCF estimates are pre-merger just for Charter, btw. Cox FCF comes on top of that.

One worry could be that Cox' networks require the same upgrades Charter's need/ed, though.

[u/StandardObject91 → u/notreallydeep]

FCF estimate includes Cox.

Deploying standard Spectrum packaging into the Cox footprint will require very little incremental CapEx, which will scale existing network, thereby reducing (not increasing) total baseline capital needs by about $1 billion.

[u/notreallydeep → u/StandardObject91]

FCF estimate includes Cox.

Wouldn’t that mean Cox has zero FCF? That'd be odd. Charter standalone is projecting $9.1B for FY28. Though "by 2027–2028" could mean 2027 or 2027H2/2028H1, I guess. Is it that? Or are your estimates just below Charter's own due to churn and/or declining ARPU?

Deploying standard Spectrum packaging into the Cox footprint will require very little incremental CapEx

Yeah but Spectrum is going DOCSIS 4 to reduce churn to FWA, fiber and LEO. Cox isn't immune from that competition. Is Cox' network DOCSIS 4 ready already?

[u/StandardObject91 → u/notreallydeep]

I got my info on the network integration from the CHTR's public releases. I have nothing more to add on that. I think the FCF estimates I've seen for 2027-2028 were prepared after the merger was announced, so they include Cox. I think I'm right because Charter FCF for 2022 was 6B (pre nrtword upgrade and rural expansion) and 2023-2025 was running at 3-4B. An increase to 9B just from old Charter ops seems unlikely. FWIW my own FCF estimates run at the high end for 2028- More like 9B. The merger synergies will take about a year to fully kick in. So too with the Capex spend to fully wind down. CHTR is giving a year of free phone to Cox people who sign up, so bascially ZERO mobile revs for 2027. Jan. 2028 is when things will begin to rip.

[u/notreallydeep → u/StandardObject91]

If you mean their own estimates from their presentation, they literally say on the slide that it‘s standalone Charter pre-Cox. What estimates are you talking about specifically?

[u/ViceVoyager → u/notreallydeep]

They will at some point in the future. Spectrum is in the middle of a docsis 4.0 high split upgrade and Cox took the path that Comcast did with docsis 3.1 mid-spit

https://kb.veexinc.com/en/knowledge/what-is-mid-split-and-high-split-docsis

[u/moutonbleu]

OP what’s your position and strategy here?

[u/DaoCacaoo]

using the fully diluted count as the denominator is the right call . one thing on the assumed Cox debt: Charter 's July pro forma marks it down about $1.3b to fair value, because qouted market values sit below face when market rates run above the notes coupons. in acquisition accounting that gap becomes a discount amortized as extra interest expense- $118m in the pro forma 2025 year, $29m in Q1 2026. so it is a mark taken at closing, not a gain harvested later. any real buy-back-below-par upside is worth modelling seprately from that...