The Altice announced Friday a restructuring operation which involves the merger with a new company based in the Netherlands and that will allow you to move to new acquisitions without diluting the control of Patrick Drahi the group.
The Altice SA, which is listed on the Amsterdam stock exchange, said in a statement that it will merge with a new company under Dutch law – in practice disappears Altice SA and arises Altice NV – and create two classes of shares. It is in exchange for these shares, “A” and “B”, that existing shareholders Altice will deliver their titles: for every share held currently receive three share class “A”, each equivalent to one vote, and type of action a ‘B’, with 25 voting rights. The new shares will continue to trade on the Dutch stock exchange.
Since the acquisition of financing modality used by Altice involves the delivery of shares and recourse to debt, Drahi team can thus have more actions to deliver without this pass weaken the leadership position that it has in the shareholder structure. “With the merger, Altice will ensure a powerful ability to make acquisitions through the delivery of shares, without harming the rights of control of the company’s founder,” said the group’s chief executive, Dexter Goei, in a statement.
“This is an operation that will strengthen the position of Altice group next growth phase,” added the manager.
Financial Times (FT) says Patrick Drahi this strategy is that used by other business media and telecommunications, as Rupert Murdoch (the 21st Century Fox), John Malone (Liberty Global, which recently won the Altice in the race to Time Warner Cable) and Brian Roberts (Comcast).
“Now nothing is beyond the reach of Altice,” he told FT in charge of a bank which, according to the newspaper writes, knows the company led by Drahi. The entrepreneur will thus be able to deliver greater number of shares, in association with debt contracts to move to new acquisitions.
The Altice currently has a net debt of about 30 billion euros, but despite some analysts draw attention to the scale of the debt, the group’s president has advocated that the debt is not a problem for a company that grows and shows positive results. Said it recently in a parliamentary commission in France, where the deputies questioned him on the subject.
But this is an argument that does not convince everyone, beginning with the very French Minister of Economy, Emmanuel Macron, it was a frontal opposition to the recent attempt to purchase of Bouygues Telecom for ten billion euros, questioning a growth strategy that goes through the debt and reducing costs aggressively in companies in which Altice comes in.
The purpose of the offer that the brothers Martin and Olivier Bouygues refused to Altice published on Thursday a statement regretting that Bouygues Telecom has taken them to vote, chumbando it, without operator’s management, or their advisors financial, have even sought with the Altice more details on the proposal
In the same statement, the company still devalues some of the arguments that Bouygues Telecom has to reject the operation:. the impact on jobs and the regulatory risks. The Altice ensures that anticipated these issues, and even guaranteed Bouygues and the French Government willingness to sign a commitment to preserving jobs (as happened in SFR, which merged with Numericable).
In the case of regulatory risks, also revealed that negotiated with the Iliad (owner of the fourth operator in the market, Free Mobile, which had tried to buy Bouygues) the allocation of some assets to get approval from the French regulators, which says even have started contacts on the issue.
As for the restructuring announced on Friday, still has to be voted by two-thirds majority in the General Assembly, but Altice, which is majority owned by Drahi, with the support of Armando Pereira, ensures that already has the approval of almost 65% of capital. The operation is based on an evaluation of the company 61.9 billion, which includes, besides the debt, 32.5 billion euros market capitalization. A value which translates to “an increase of 557%” since the dispersion of capital in January last year, underlines the Altice.
The expectation is that the whole process is completed in the summer, says the owner of the PT Portugal.
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