Cable One urges judge to unblock Mega Broadband deal

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(Source: Timon Schneider)

Adding a twist to the Cable One-Mega Broadband saga, Cable One has asked a New York federal judge to reverse course and dissolve a temporary restraining order placed on its pending acquisition for the rest of Mega Broadband Inc. (MBI) that it does not already own.

Cable One's brief filed today (a redacted version is available here) arrives just days after the judge temporarily blocked the Cable One-MBI agreement after one of Cable One's lenders, CoBank, sought (and obtained) an emergency restraining order to delay the $480 million transaction. CoBank argued the pending deal amounted to a "fraudulent transfer," and that its $1.1 billion of outstanding loans to Cable One would be in jeopardy if the transaction were to go through.

The judge's October 9 order to temporarily block the transaction arrived just as Cable One was about to close its purchase of the 55% remaining stake in MBI that it did not already own. MBI owns Vyve Broadband, an operator that had about 210,000 customers and a footprint passing about 657,000 locations as of September 2025. In a transaction initiated in 2020, Cable One agreed to acquire 45% of MBI, with an initial option to acquire the rest starting in 2023.

Related:Judge halts Cable One-Mega Broadband deal as it was about to cross the finish line

Cable One: CoBank waging campaign to 'torpedo' the deal

On Monday (October 12), Cable One disputed CoBank's claims, arguing that the TRO was entered prior to any hearing or court appearance by the operator, and that it was making progress toward finalizing a series of transactions with GTCR LLC (the private equity firm that formed MBI) and certain existing lenders and private lenders.

Cable One is now asking the court to unblock the deal, or to order CoBank to post a $480 million bond if the court opts to retain the TRO and move ahead with a hearing.

In the brief, Cable One argued in part that CoBank has failed to show it will suffer irreparable harm if the transaction were to go forward. Specially, Cable One held that CoBank did not establish it would face an "imminent risk" that Cable One would be unable to make quarterly amortization payments of about $2.5 million in the wake of the transaction.

"CoBank cannot show any 'actual and imminent' risk of any harm to its interests – much less an irreparable one," Cable One said.

Cable One notes it has never missed a loan payment, and that CoBank and other lenders would have remedies available to them if that were to occur. Cable One said it has been negotiating with CoBank, GTCE and others for "several months," with CoBank offering "several financing proposals of its own" during that time.

Related:Incoming Cable One CEO will face tough challenges

"Upset that CABO chose the proposed transaction with GTCR and its lender group as being in the best interests of CABO over CoBank's preferred transaction CoBank embarked upon a campaign to torpedo the GTCR deal," Cable One told the court. "And CoBank waited until the very day that closing was set to occur before rushing into court seeking to exploit an 'emergency' of its own creation."

Cable One also holds that CoBank has been trying to "disrupt" the alternative financing arrangements that Cable One had negotiated. On that point, the operator said that by October 2, the operator, GTCR and all of Cable One's revolving lenders (save for CoBank) had agreed in principle on a financing transaction set to close on October 9 that would provide Cable One with a new loan of $1.3 billion. Some $480 million of it was to be used to repay revolving debt and also to give Cable One "additional runway to execute on its business priorities."

Cable One also alleged that CoBank made an effort to disrupt the transaction by purchasing Cable One debt on October 8 on the secondary market.

Further delays will cause 'material risk' to financing deal, shareholders

Cable One also argued that further delays would create "material risk" to its aforementioned financing agreement.

Related:Cable One locks in deal for all of Mega Broadband

The operator added that the delay is likewise causing "immediate and ongoing harm" to Cable One shareholders, noting that its stock immediately dropped by 20% when CoBank filed the complaint and continued to drop in after-hours trading. Cable One shares rebounded a bit today – they were up nearly 10% in afternoon trading. Cable One shares are down 88% year-to-date.

"Every day the TRO remains in place, CABO risks losing the financing partners whose interlocking commitments it needs to satisfy its contractual obligation to GTCR and shore up its balance sheet; its stockholders continue to bear the uncertainty that has already driven down the Company's stock price; and the employees of both CABO and MBI remain in limbo," Cable One told the court.

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