Its holding Altice acquires 70% stake in the American Suddenlink, valued just over $ 9 billion.
He also covets the second American actor industry, Time Warner Cable.
A French swallowing an American prey. The Minister of Economy, Emmanuel Macron, has probably dreamed. Patrick Drahi, President of Altice, the parent of Numericable, SFR has. The Altice telecommunications group offers a place in the United States by acquiring the surprise 70% Seventh US cable operator, Suddenlink, valued 8.22 billion euros. It’s been several months since the businessman is negotiating in secret. Wednesday Altice has taken everyone by surprise, announcing his arrival in the land of Uncle Sam Markets have appreciated. Altice share closed up 11.59%, to 129 euros.
Patrick Drahi finds there his fourth operation in little more than a year after repurchases, in quick succession, SFR, Virgin Mobile, and Portugal Telecom. Without fanfare. As usual, the man Franco-Israeli businessman, who made the headlines last year after the acquisition of SFR, remained quiet throughout the day Wednesday. Not a word to the press or to the financial community. These are colleagues who have unveiled the details of the operation funded for $ 6.7 billion in debt Suddenlink to 500 million by a loan from BC Partners and CPP Investment Board (the former owners of Suddenlink, which retain 30 % of capital) and 1.2 billion in cash. The acquisition agreement values the asset 7.6 times Adjusted EBITDA synergies.
A follower of John Malone
A leveraged buyout. The specialty of Patrick Drahi. In the United States, as in France, he should apply his usual recipe: crush costs by developing synergies to boost margins. And repay debt. The reputation of Patrick Drahi already preceded the Atlantic. The American press described him as a ruthless hunter costs. Wall Street analysts expect it to do Suddenlink undergo the treatment he has already implemented in Europe and particularly in France. It has already announced plans to save the equivalent of $ 200 million per year in the US cable operator.
But it was his acquisition bulimia that is most talked about. The management of Suddenlink finds nothing wrong, quite the opposite: “ Until then, we had by the resources to participate in sector consolidation movement ” argues the CEO Jerry Kent. “ The support of Altice will help us to achieve critical mass which will enable us to become a major US cable .” Suddenlink is actually too small to survive in the state. With $ 2.3 billion in revenue last year, he advanced behind the giants Comcast and Time Warner Cable. It has 1.5 million clients in fifteen states, from Texas to West Virginia.
After multiple redemptions in recent months, one would think qu’Altice account pause. But that would be to underestimate Patrick Drahi. It is already in talks with Time Warner Cable for a possible acquisition. Valued around $ 45 billion, the group would be a prey much harder to swallow for Altice which, by comparison, weighs “only” 30 billion euros on the stock market. The American group has about 11 million customers (ten times more than Suddenlink) in New York and Los Angeles in particular. The Americans are Patrick Drahi especially daring attack and that the “King of Cable” American billionaire John Malone, chairman of Liberty Global (read an analysis page 11) who covets the same target. A man whom the French have great admiration. “ John Malone, is its model ,” the entourage of Patrick Drahi. The student does exceed the master?
Lucie Robequain lrobequain@lesechos.fr New York Office Fabienne Schmitt, Les Echos
Key figures
€ 30 billion
The amount spent in a few months to buy SFR, Virgin Mobile, Portugal Telecom and Suddenlink.
$ 44.5 billion
The market capitalization of Time Warner Cable, which covets Altice, although it weighs only 30 billion euros.
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