Altice corruption probe extends to France; sale of Portugal biz progressesAltice corruption probe extends to France; sale of Portugal biz progresses

Altice Group is rarely out of the headlines these days, with continuing speculation about the sale of its businesses to cut debt amid rising interest rates, and the ongoing probe into corruption allegations aimed at the group's Portuguese operations over procurement activities.

The past few days have brought both good and bad news for Altice, courtesy of reports by Bloomberg based on unidentified sources. For example, the news agency reported on Friday that Altice founder Patrick Drahi is closing in on a buyer for Altice Portugal, with Saudi Telecom Co (STC) said to have emerged as the highest bidder.

On the same day, Bloomberg then reported that French prosecutors have opened their own preliminary probe into the potential corruption linked to Altice, indicating that scrutiny is spreading across the group. France's Parquet National Financier apparently opened its investigation in September, although it appears that this has not been previously reported.

Citing sources close to the situation, Bloomberg said the French prosecutors are "looking into suspicions of corruption of individuals who don't hold public office, money laundering and attempts to conceal these offenses."

The corruption probe in Portugal first surfaced last year, meanwhile. It focuses on alleged efforts to rig the group's local procurement process and is expected to take years to resolve.

There have already been a number of repercussions throughout the group. For example, Armando Pereira, who founded Altice together with Patrick Drahi, was placed under house arrest from July to October 2023 and has been released on bail.

In addition, Alexandre Fonseca, the co-CEO of Altice Group who led Altice Portugal from November 2017 to April 2022, left the group in January, although he was not considered a suspect in the investigation. Altice has also suspended about 15 employees as a result of the investigation.

In a November 2023 statement, Altice International, the home of Altice Portugal, and Altice France said they were on track to transition away from all suppliers potentially implicated in the Portuguese authorities' investigation by the end of 2023.

Meanwhile, Altice USA made several moves last year, including the launch of an internal investigation into its procurement activities, a change in procurement-related leadership and the suspension of some capital spending.

Big task ahead

Overall, it's an understatement to say that Drahi has his hands full. On the one hand, he is attempting to cut around $60 billion in borrowings that enabled him to stitch together Altice through a series of debt-fueled acquisitions over the past decade.

On the other hand, he is seeking to repair the damage to the Altice brand caused by the corruption scandal in Portugal, and revive the group's businesses.

It has already been reported that Drahi is willing to put every part of Altice up for sale. Last November, it sold a majority stake in its data center business to a Morgan Stanley infrastructure fund.

The Portuguese operation is next on the block, with suitors said to include STC as well as a Warburg Pincus-backed consortium and Xavier Niel's Iliad. Rumors also surfaced recently that Charter Communications, as well as possibly Comcast and T-Mobile US, are exploring a play for Altice USA.

Drahi is hoping to fetch as much as €10 billion for Altice Portugal, though potential bidders have been struggling to meet that expectation, Bloomberg notes. As things stand, STC has reportedly submitted the highest binding offer, although there is no certainty as yet that the two parties will be able to reach a deal.