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Cable Investor Altice Shares Gain After $1.8 Billion IPO

Altice SA (ATC), the telecommunications investor founded by entrepreneur Patrick Drahi, advanced in its first day of trading after raising 1.3 billion euros ($1.8 billion) in an initial public offering.

The shares rose as much as 5.7 percent and closed 1.1 percent higher at 28.58 euros in Amsterdam, giving Altice a market value of 5.9 billion euros. Altice and Next LP, the holding company controlled by Drahi, sold 46.1 million shares at 28.25 euros apiece, in the largest IPO in Amsterdam since 2006 and the biggest by a European cable carrier.

Altice owns and operates cable, mobile, Internet and data-center companies in countries including France, Israel, Belgium and Portugal. The company has a growing business in the French West Indies and Caribbean and agreed to buy Orange SA (ORA)’s Dominican Republic unit in November last year for $1.4 billion after reaching a deal for fixed-line operator Tricom SA in the country a month earlier.

The investor in French broadband provider Numericable SAS (NUM) has identified at least 10 potential acquisition targets to bolster its market positions or expand into new regions.

“There are opportunities in each one of our markets,” Chief Executive Officer Dexter Goei told reporters in Amsterdam today. “We’re effectively in nine different regions or countries, so we’re looking at more than nine opportunities.”

French Deals?

While Numericable and Vivendi SA (VIV) have held talks on and off in the past year about a linkup without being able to agree on valuation, Altice is making a renewed push to consolidate telecommunications assets in Europe, people familiar with the matter said this month. Vivendi, preparing a spinoff of its French phone business SFR, is also weighing a possible sale of the unit to Numericable and Altice, they said.

“It takes two to dance,” Drahi told reporters today in Amsterdam when asked about linking up with SFR.

Mergers in the European cable industry are necessary because there are too many operators, he said. The U.S. has three or four large operators, while in Europe there can be five or more in a single country, he said.

In the IPO, Altice sold 26.5 million new shares and Drahi’s Next sold 19.6 million shares. Drahi said he sold some of his stock to boost the volume on the market.

Liberty, Ziggo

Europe’s cable assets are in demand. John Malone’s Liberty Global Plc agreed to fully take over Dutch cable operator Ziggo NV (ZIGGO) for $6.7 billion in cash and stock this week. In Spain, Grupo Corporativo ONO SA is working on an IPO, while Vodafone Group Plc (VOD) is also interested in taking over the company, people familiar with the matter have said.

Goldman Sachs Group Inc. and Morgan Stanley managed the IPO, along with HSBC Holdings Plc, Credit Suisse Group AG and Deutsche Bank AG.

Companies in Europe, the Middle East and Africa raised about $33 billion in IPOs in 2013, more than double what they sold in the previous year, according to data compiled by Bloomberg.

To contact the reporters on this story: Elco van Groningen in Amsterdam at vangroningen@bloomberg.net; Adam Ewing in Stockholm at aewing5@bloomberg.net

To contact the editor responsible for this story: Kenneth Wong at kwong11@bloomberg.net

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