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Altice Taken Private

11 September 2020 by jbchevrel

Altice is a multinational telecommunications and content provider. They provide broadband Internet, including in France with SFR, and in Portugal via Meo brand. Patrick Drahi is a French-Israelo-Portuguese businessman who currently owns 77.6% of Altice shares. Anecdotally, he also owns Sotheby’s, which he acquired last year at a 61% premium. Today, Mr Drahi has offered to buy all the remaining Altice stocks at a 24% premium vs Thursday's closing price. Altice stocks rose by that amount. Altice finco CDS widened by 35bp on the day, as the company cited its debt levels (€29B as of Jun) and stock price volatility as the reasons for going private. This is to be compared with +10bp on the benchmark iTraxx XOver, which now trades v2 after Hema BV exit this week. Also, the Altice shares had more than halved from February’s peak, and were looking cheap vs peers with EV/EBITDA of about 6x, something which probably prompted the move. Mr Drahi had been cutting costs, as Net Debt exceeded predicted forward EBITDA by more than 6x. Mr Drahi was also engaged in selling assets (stakes in Portuguese and French fibre units).