Thursday, September 17, 2015

Altice Expands In US With $17.7B Cablevision Deal

(Reuters) -- European telecoms group Altice will become a major force in the lucrative U.S. cable market after it agreed to buy fourth-largest operator Cablevision for a mix of cash and shares in a deal worth $17.7 billion including debt.

The move is the latest foray by French-Israeli billionaire and Altice founder Patrick Drahi, who built a telecoms and cable empire in recent years via debt-fueled acquisitions in France, Portugal and Israel.

Drahi entered the United States in May by buying small regional cable group Suddenlink for $9.1 billion and had declared he would do more acquisitions so as eventually to earn half of Altice's revenue there.

In talks that began in June, Drahi managed to convince Charles Dolan, the patriarch of the Irish-American family that owns Cablevision, to part with the asset they had long said they would not sell.

Altice will pay $34.90 in cash per share, a 22 percent premium on Wednesday's closing price of $28.54, and a person close to the company said it will finance the deal with $3 billion from a share sale and $7 billion in debt.

Cablevision has 3.1 million customers in the New York, Connecticut and New Jersey area.

Patrick Drahi
Drahi is expected to apply his cost-cutting zeal to generate $900 million in synergies a year at Cablevision, but will have to contend with fast-changing competition as consolidation picks up among U.S. cable groups seeking to cope with changing customer viewing habits.

"The acquisition of Cablevision represents Altice's next step in the U.S. market," Altice said in a statement. "Together both operators represent the fourth-largest cable operation in the U.S. market."

The transaction, which is expected to close in the first half of next year, is to be financed with $14.5 billion of new and existing debt at Cablevision, cash on hand at Cablevision and $3.3 billion of cash from Altice.

Altice, which has also been snapping up television and radio targets in Europe in recent months, will also become the owner of Newsday newspaper and local news channel News 12 Networks.

Following the announcement of the acquisition of Cablevision Systems Corporation  by Altice, Cablevision Chief Executive Officer James L. Dolan issued the following statement on behalf of the Dolan family:
“Since Charles Dolan founded Cablevision in 1973, the Dolan family has been honored to help shepherd our customers and employees through the most extraordinary communications revolution in modern history. 
Now, nearly half a century later, the time is right for new ownership of Cablevision and its considerable assets. We believe that Patrick Drahi and Altice will be truly worthy successors, and we look forward to doing all we can to affect this transition for our customers and employees. We expect that Cablevision will be in excellent hands. 
For the Dolan family, we move forward with AMC Networks and The Madison Square Garden Company – two and, eventually, three public companies – all born of Cablevision and each with brighter prospects today than ever before. 
With profound gratitude to our employees, customers and shareholders who have made our vision a reality, the Dolans look forward to continuing this fascinating journey.”

No comments:

Post a Comment