& cplSiteName &

Altice Spins Off US Biz, Rejigs in Europe

Iain Morris

Network operator Altice is spinning off its US subsidiary and restructuring its European operation in a major overhaul aimed at reinvigorating the underperforming business.

Under the plans, the 67% stake that Altice holds in Altice USA will be distributed to existing shareholders, who will also receive a cash dividend of $1.5 billion before the completion of the spin-off, which is expected to happen in the second quarter of this year. (See Altice Unveils Group Reorganization.)

Altice's board has also authorized a new share repurchase program of $2 billion following the restructuring.

Outside the US, the company will operate three units under the Altice Europe name: Altice France, including the Numericable-SFR business, as well as assets in French overseas territories; Altice International, which will include its Portuguese, Dominican and Israeli subsidiaries; and an entirely new division called Altice Pay TV, which will look after content and sports rights.

The restructuring, it is hoped, will help the respective businesses to focus more clearly on their strategic objectives and lead to operational improvements.

"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," said Altice founder Patrick Drahi in a statement.

Among other things, the move will ensure the separate businesses have dedicated management teams that can focus on very different regulatory and business challenges in the US and Europe.

Altice said there would be "simplified, more efficient and dynamic operating and financial structures with clear financial targets."

One thing that will not change is the controlling position of Drahi, who, as Altice's biggest shareholder, will be the chief beneficiary of the dividend payments and share repurchase program. Following the spin-off, Drahi will become the president of Altice Europe and the chairman of Altice USA.

Drahi, who owns 52.2% of the company, has built Altice into a major international player through a series of bold takeovers during the past few years. That acquisition strategy has proven costly: Debts have soared to about €49.6 billion ($59.2 billion), equal to more than five times Altice's annual EBITDA, while fierce cost cutting has hindered Altice's ability to compete in markets such as France.

For the third quarter of 2017, group revenues shrank by nearly 2%, to about €5.76 billion ($6.87 billion), compared with the year-earlier period. EBITDA rose 1.8%, to around €2.36 billion ($2.82 billion), over the same period.

Mounting concern about the company's debt profile has caused Altice's share price to fall by 57% since early June last year. At the time of publication, shares were up 5.8% in Amsterdam Tuesday, at €10, on news of the restructuring plan.

The rollout of gigabit broadband access networks is spreading. Find out what's happening where in our dedicated Gigabit Cities content channel here on Light Reading.

That restructuring firmly ushers in a new phase in Altice's story as Drahi turns his attention away from deal making and concentrates on operational improvements.

The new strategy could involve the divestment of assets not seen as core to Altice. The company last month said it had sold an Internet services company and data center business in Switzerland to InfraVia Capital Partners in a deal worth about 214 million Swiss francs ($218 million). According to the Financial Times (subscription required), it is also seeking a buyer for its network in the Dominican Republic, which has been incongruously lumped in with European assets under the restructuring announced today.

Today's move follows some reshuffling in mid-November that saw Drahi return to "active management" as president of the board as well as the resignation of Michel Combes from the position of CEO. (See Altice Moves to Stem Investor Panic.)

Dexter Goei, the CEO of Altice USA, was announced as Combes's replacement at the time, but he will now focus on the US business, which includes the Suddenlink and Cablevision businesses that Altice bought during its acquisition spree. Combes, of course, has resurfaced at Sprint. (See Sprint Appoints Ex-AlcaLu Boss Combes as CFO.)

Meanwhile, Altice CFO Dennis Okhuijsen will become CEO of the Altice Europe business comprising Altice France, Altice International and Altice Pay TV.

— Iain Morris, News Editor, Light Reading

(1)  | 
Comment  | 
Print  | 
Newest First  |  Oldest First  |  Threaded View        ADD A COMMENT
User Rank: Light Sabre
1/9/2018 | 10:43:52 AM
Kaos kompany
The paint is still wet on the Cablevision/Optimum rebranding to Altice, and now ... time to order some new paint. Just weird.
Featured Video
From The Founder
Light Reading founder Steve Saunders grills Cisco's Roland Acra on how he's bringing automation to life inside the data center.
Flash Poll
Upcoming Live Events
March 20-22, 2018, Denver Marriott Tech Center
March 22, 2018, Denver, Colorado | Denver Marriott Tech Center
April 4, 2018, The Westin Dallas Downtown, Dallas
May 14-16, 2018, Austin Convention Center
All Upcoming Live Events
Hot Topics
MWC 2018 Threatens to Be 5G New Radio Bore
Iain Morris, News Editor, 1/10/2018
Sprint Says No to mmWave, Yes to Mobile 5G
Dan Jones, Mobile Editor, 1/11/2018
Altice USA Embraces Home-Alone Strategy
Alan Breznick, Cable/Video Practice Leader, Light Reading, 1/11/2018
Huawei Still Knocking on US Door – but AT&T Deal Thwarted
Ray Le Maistre, International Group Editor, 1/9/2018
Animals with Phones
Customer Support Done Right Click Here
"You've reached 'Who's a Good Boy?' How can I direct your call?"
Live Digital Audio

A CSP's digital transformation involves so much more than technology. Crucial – and often most challenging – is the cultural transformation that goes along with it. As Sigma's Chief Technology Officer, Catherine Michel has extensive experience with technology as she leads the company's entire product portfolio and strategy. But she's also no stranger to merging technology and culture, having taken a company — Tribold — from inception to acquisition (by Sigma in 2013), and she continues to advise service providers on how to drive their own transformations. This impressive female leader and vocal advocate for other women in the industry will join Women in Comms for a live radio show to discuss all things digital transformation, including the cultural transformation that goes along with it.

Like Us on Facebook
Twitter Feed