What Happened:Shares of broadband and telecommunications services provider WideOpenWest (NYSE:WOW) jumped 31.8% in the afternoon session after the company received preliminary non-binding acquisition offer from Crestview and DigitalBridge (WOW's largest shareholder). The proposal valued WOW at $4.80/share, which implied a 25% premium to WOW's stock closing price on May 2, 2024. Crestview owns 38% of WOW, while Digital Bridge is a communication infrastructure alternative asset manager who has raised fairly meaningful new capital for a new fund. Following the offer, WOW announced that its board would form a special committee of independent directors to evaluate the proposal.
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What is the market telling us:WideOpenWest's shares are somewhat volatile and over the last year have had 35 moves greater than 5%. But moves this big are very rare even for WideOpenWest and that is indicating to us that this news had a significant impact on the market's perception of the business.
WideOpenWest is up 23.1% since the beginning of the year, but at $4.92 per share it is still trading 56.6% below its 52-week high of $11.32 from May 2023. Investors who bought $1,000 worth of WideOpenWest's shares 5 years ago would now be looking at an investment worth $607.67.