Altice Selling $2 Billion of Shares to Fund Cablevision Dealby
Sale includes vote-rich class B stock recently created
Shares fall as much as 7.5% in Amsterdam after announcement
Billionaire Patrick Drahi’s Altice NV, the European telecommunications company buying Cablevision Systems Corp., is raising 1.8 billion euros ($2 billion) by selling new stock to help finance the takeover of the U.S. cable carrier.
Altice plans to sell as many as 69,997,600 A shares and up to 24,832,500 vote-rich B shares, in the first stock sale since creating the Dutch holding company to allow founder Drahi to keep control of his cable empire while using stock to finance acquisitions. The company has demand for all the A shares on offer, according to a term sheet for the deal seen by Bloomberg.
The amount offered is equal to as much as 10 percent of the company’s stock, according to a statement Thursday. Altice also priced $8.6 billion of new debt, with an average cost of 7.6 percent.
The shares fell as much as 7.5 percent and traded 3.2 percent lower at 18.12 euros at 10:05 a.m. in Amsterdam. They are down almost 40 percent since early August, according to data compiled by Bloomberg.
Altice, Europe’s most acquisitive cable company, agreed last month to buy Cablevision in a $17.7 billion deal to create the fourth-largest U.S. cable provider.Among potential takeover targets for Drahi in Europe is Dutch carrier Royal KPN NV, people familiar with the matter have said. Chief Executive Officer Dexter Goei said in an interview last week that Altice would take a break from its buying binge to focus on cutting costs and integrating cable systems.
Drahi, whose cable and phone empire stretches from Israel to France and the Caribbean, used Altice to make takeover bids for French carrier SFR and Portugal’s largest phone company. Altice is also the controlling shareholder in Numericable-SFR SAS, the French cable and wireless company that Drahi used to make a failed bid Bouygues Telecom.
JPMorgan Chase & Co. is arranging the stock sale.