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

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(Source: Björn Wylezich/Alamy Stock Photo)

A New York federal court on Friday temporarily blocked Cable One's pending deal to acquire the rest of Mega Broadband Investments (MBI) it did not already own. The court decision was handed down soon after CoBank, one of Cable One's lenders, sought an emergency restraining order to delay the $480 million transaction.

The temporary restraining order will remain pending a hearing. Cable One has not commented.

Cable One shares plummeted $4.07 (-26.78%) Friday, closing at $11.14 each. As of Friday afternoon, Cable One shares have dropped 90.13% so far in 2026.

The judge's order 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, a cable/broadband operator that had about 210,000 customers and a footprint of roughly 657,000 passings as of September 2025. The Cable One-MBI agreement was initiated in 2020, when Cable One agreed to acquire 45% of Mega Broadband, with an initial option to acquire the rest starting in 2023. In January, Cable One amended the original terms to acquire the rest of the MBI stake by October 1, 2026.

Related:Cable One flags bigger broadband losses, Vyve financing doubts

Transaction was heading toward an October 9 close

The court's decision also entered the picture a week after Cable One announced it was in "advanced discussions" with GTCR (the private equity firm that formed MBI), certain existing lenders and potential new investors to iron out the operator's capital requirements. At the time, Cable One and GRCR announced that they had agreed to extend the deadline to complete the transaction to Friday, October 9.

The Wall Street Journal reported on October 8 that Cable One was nearing a deal to secure about $1.25 billion in new financing from new and existing shareholders to "address its balance sheet" and pay down some existing debt. The WSJ said Cable One was poised to announce the financing agreement as soon as October 9.

But that plan apparently came to a screeching halt after CoBank, which holds about $1.1 billion in secured credit issued by Cable One, sued to stop a $480 million transfer. A portion of CoBank's loans with Cable One are due in May 2028, and larger portions, including a B3 loan of $727.2 million, is due and payable on October 30, 2029.

CoBank argued that Cable One had previously disclosed that the equity is worth a fraction of that amount and that if the transfer were to take place, CoBank's ability to be repaid on its $1.1 billion of outstanding loans "will be irreparably compromised."

Pending transaction is a 'fraudulent transfer,' lender claims

CoBank claimed that the pending $480 million transaction amounts to a "fraudulent transfer," and believes the terms of the reported $1.25 billion in new financing for Cable One amounts to "predatory economics."

Related:Incoming Cable One CEO will face tough challenges

"Should this $480 million transfer occur, Cable one would sink deeper into insolvency and make Cable One's remaining assets unreasonably small given its already large debts," CoBank told the court. "Cable One is trending towards a bankruptcy proceeding."

Cable One, which shed 17,400 broadband subs in Q2 2026, ended the quarter with gross debt of $3.06 billion.

Trouble with the transaction has been brewing. In June, Cable One disclosed in an 8-K filing that the designated exchange agent for its prior offer to MBI lenders of the secured term loans outstanding had "received irrevocable lender acceptances" from MBI lenders holding about 34% of all outstanding MBI term loans.

"The Company reserves the right, in its sole discretion, not to consummate the MBI Term Loan Exchange Offer for any reason," Cable One said at the time.

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