World Media

Altice spins off U.S. business and alters European structure

Share
AP Images
Altice founder Patrick Drahi

This move is created to assuage investor concerns about the impact of Altice's investment in premium content on the underlying network business.

Less than two years after acquiring Cablevision and its Optimum cable broadband operations, Altice N.V.is spinning off a majority stake in Altice USA after sharply scaling back its workforce last year even as it committed to a massive upgrade in fiber optic cable to customer homes.

"The separation will allow both Altice Europe and Altice USA to focus on their respective operations and execute against their strategies, deliver value for shareholders, and realize their full potential", Drahi said.

Dennis Okhuijsen will become CEO of Altice Europe and Dexter Goei will continue to serve as chief executive of Altice USA. The core company - Altice NV - will relinquish its 67.2% interest in Altice USA by handing it over to its own shareholders as well $1.5 billion in cash from Altice USA.

Turning around operations in France and Portugal are the top goals for the European business.

The dividend to be paid to Altice Europe will add to Altice USA's net debt, which was approximately US$21.2 billion at the end of the third quarter of previous year.

Following the separation, Patrick Drahi, Founder of Altice, will retain control of the two units, serving as President of the Board for both arms of the company. He added that the company also has a "clear plan" to further strengthen its long-term balance sheet position as disposes of non-core asset. The change is expected to give a significant boost to Altice France's free cash flow.

Altice Europe and Altice USA will be managed by two distinct management teams, focused exclusively on the performance in their respective markets.

Altice France: Altice France will include SFR Telecom, SFR Media (NextRadioTV6 & Press), French Overseas Territories, Altice Technical Services France and Intelcia customer services.

Altice, whose operations stretch from Israel to the Dominican Republic, saw its shares plummet after a financial report signaled it would fail to grow in France in 2017, despite large investments in mobile and fixed networks. This new arrangement will include the transfer of other premium content contracts from Altice France to Altice Pay TV and allow Altice France to continue to distribute premium pay TV content to its customers including SFR Sports and Altice Studio channels. Months earlier, Altice had bought Suddenlink which provides service in nine states, with Altice USA providing service today to 4.9 million homes and businesses and reaching a deal late a year ago to develop a mobile telephone service using Sprint's wireless network. Special attention will be put on KPIs to improve revenue growth, the complete implementation of opex efficiencies, and a full scale deployment of Altice One and fibre (FTTH) build out. All instruments remain in place on the same terms and the availability of revolving credit facilities will be unaffected. Altice USA shares jumped 14 percent Tuesday morning on the New York Stock Exchange to above $24, the issue's highest level since early November. An EGM will be held sometime in Q2.

Share