CoBank seeks to block Cable One's roughly $480 million stake purchase
Key Facts
CoBank sought an emergency court order to prevent Cable One from paying about $480 million to buy the remaining stake in Mega Broadband, according to an Investing report published on Friday, October 9, 2026. The move came on the scheduled closing date, putting the transaction's payments at the center of a dispute between the company and one of its creditors. Cable One said in its statement on the lawsuit that the bank is a creditor under its existing credit agreement. It said the complaint alleges that paying for the stake would constitute a "constructively fraudulent transfer of assets." The bank's request thus seeks to block the transfer of funds needed for the purchase, based on an objection concerning the protection of assets available to creditors and the company's solvency after the transaction.
The transaction targets a 55% stake in Mega Broadband, while Cable One already owns 45% of the company, according to its announcement on the move to full ownership. The remaining shares are held by investors affiliated with GTCR and Mega Broadband's management, whose stakes the transaction seeks to acquire. GTCR's investors exercised an option to sell their stake to Cable One on January 2, 2026, according to the same announcement. When it announced the agreement, Cable One estimated the price of the remaining stake at between about $475 million and $495 million. The target company operates under the Vyve Broadband brand and provides internet, fiber, video and voice services to business and residential customers, the operations Cable One seeks to own in full.
The purchase agreement was preceded by an amendment to the partnership agreement that included payments to Mega Broadband's other shareholders, according to an earlier Cable One statement on the amendment. Under the arrangement, Cable One paid $250 million to those shareholders before settlement of the final purchase price for the stakes. The other shareholders also received the proceeds of $100 million in new debt borrowed by Mega Broadband, alongside the amount Cable One paid directly. The amended agreement stipulated that the combined prior payments of $350 million would be deducted from the final purchase price on a dollar-for-dollar basis. This provision linked the funds shareholders received under the partnership amendment to the amount Cable One would subsequently pay to acquire their remaining stakes.
In its acquisition announcement, Cable One said its plan to finance the stake purchase combined cash resources and borrowing, making completion dependent on those two funding sources. The company also estimated Mega Broadband's net debt upon the move to full ownership at between about $845 million and $895 million. That debt represents liabilities of the target company, in addition to the price Cable One intends to pay for the selling shareholders' stock. CoBank, meanwhile, holds about $1.1 billion in secured credit extended to Cable One, according to Investing's report on the lawsuit. The bank alleges that completing the acquisition would "deepen the cable operator's insolvency" and impair the remaining assets available to creditors, the financial basis for its objection to the outflow of purchase funds.
Before the lawsuit was filed, Cable One announced that it was in advanced financing talks with GTCR, some of its existing creditors and a group of private lending institutions. The company said the discussions were intended to address its upcoming capital needs as it worked to complete the purchase of the remaining stake in Mega Broadband. The parties to the talks thus included an investor connected to the transaction, alongside existing creditors and other institutions providing private financing. In the market, Investing's report published on the day of the news said Cable One shares fell about 33% during Friday trading. The decline came during a session that coincided with the request for a court injunction and the purchase deadline, while the company had already announced efforts to arrange financing to meet its upcoming needs.
Cable One and GTCR had agreed to extend the deadline for completing the purchase of the remaining stake to October 9, 2026, according to the statement on the financing talks. On that day, CoBank sought to halt payment through its emergency court request, before Mega Broadband became wholly owned by Cable One. The financing arrangements discussed by the company had not become definitive agreements when those talks were announced. Cable One said in the same statement that execution of any financing transaction was not assured, a qualification accompanying its announcement of advanced discussions with the lending parties. As for the target company's subsequent obligations, the term loans comprising Mega Broadband's debt cited in the acquisition announcement mature in November 2027.