Altice CEO Says Buying Spree Paused After Cablevision Deal

  • Suddenlink and Cablevision integration top focus, Goei says
  • Taking a break -- unless family-owned Cox becomes available

Altice NV Chief Executive Officer Dexter Goei says the European company, which last week agreed to buy Cablevision Systems Corp. for $17.7 billion, will take a break from its buying binge to focus on trimming costs and integrating cable systems.

Unless, that is, closely held Cox Communications Inc. becomes available.

“We owe it to our investors, both on the debt and equity side, to pause on the pace of the acquisitions, particularly on the sizable ones,” Goei said in an interview Wednesday.

Altice’s stock rose 1.5 percent to 21.73 euros in Amsterdam at 9:35 a.m., giving the company a market value of 22 billion euros ($24.7 billion).

Pausing doesn’t mean Altice is done with making deals. Goei’s boss, French-Israeli billionaire Patrick Drahi said last week -- within hours of striking the Cablevision deal -- that Altice wants to buy more cable providers and may eventually acquire a wireless carrier. The cable operator, which made a surprise entry in the U.S. market in May with a $9.1 million deal to buy a controlling stake in Suddenlink Communications, is on a campaign to consolidate the industry into three or four major cable providers.

As for the length of the break, Goei says it could be a few months to a couple of years.

“Six to nine months is nothing. We may pause for two years because we still have a huge amount of organic growth internally,” Goei said. “The only thing that would make us scratch our heads is if Cox came up and said ‘I’m going to auction my business.’”

Cox, currently No. 4 in the U.S., is a family-controlled business. The company doesn’t comment on deal speculation, said spokesman Todd Smith. “We’ve been clear about our position, that we are not for sale, though we are open to anything that would help us grow.”

Drahi has captured the attention of cable industry watchers in the U.S. and Europe by becoming one of the most acquisitive companies in telecommunications. Altice’s cable and phone empire, which Drahi built up with acquisitions financed with mounting debt, stretches from Israel to France and the Caribbean, and is the controlling shareholder in Numericable-SFR SAS, which made a failed bid for Bouygues Telecom in June.

By taking a breather on more acquisitions, Altice has a chance of managing the current costs and building up its cash supply to help pay down debt next year, Goei said.

“We are in that phase where the acceleration of our free cash flow growth is continuing and we can see ourselves deleveraging very aggressively in 2016,” he said.

If Altice’s ultimate aim is to be among the top three U.S. cable providers, Atlanta-based Cox would get them there. Charter Communications Inc. will become No. 2 when it completes its acquisitions of Time Warner Cable Inc. and Bright House Networks LLC for a combined $65 billion. Meanwhile, industry leader Comcast Corp. may wait for a new presidential administration after regulators blocked its Time Warner Cable deal, Goei said.

“We’re trying to commit ourselves to not doing anything because we have some execution work to do,” he said. “The Cox family can wait. They’ve been in there for 40 years. They can wait another couple of years.”

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