Altice Europe’s majority shareholder, founder Patrick Drahi’s investment vehicle Next Private, is to launch a €2.5 billion public offer for outstanding shares in the company in a move that would see the telecom and cable giant de-list from the Amsterdam stock exchange.
Altice Europe said that the move was aimed at enhancing e the sustainable and long-term success of its business under private ownership.
The company is proposing a cash offer of €4.11 per share, representing a premium of 23.8% on yesterday’s closing price and a premium of 16.5% on its 180-day trading average.
The company and Drahi said that they believed that a private ownership structure under Drahi’s 100% control would better serve the “sustainable success of its business and long-term value creation, as the disadvantages of the listing materially outweigh the benefits and the business can more successfully focus on the long-term following delisting in a wholly privately owned set-up”.
The company said it would be better able to achieve its gaols, focus on long-term strategy as opposed to short-term quarterly reporting, and improved its capital structure.
It said that a delisting would reduce its costs, eliminating financial reporting and board costs and the need for physical general meetings.
Altice Europe maintains that debt providers will ‘focus more on fundamental valuation and credit analysis” than equity markets.
The operator has seen its share price fluctuate recently. Altice has had something of a rollercoaster ride over the last few years, with concern about the group’s debt levels and a poor Q3 showing sparking a crisis in 2017 that led to Drahi resuming day-to-day control of the company and initiating a series of measures to reduce debt, with a promise of no further large-scale acquisitions.
The company anticipates that it will be able to close the offer in the first quarter of next year.
“The proposed transaction announced today will result in a new and exciting chapter for Altice Europe and our stakeholders. Following the Group reorganization in 2018, Altice Europe has successfully executed on the operational and financial turnaround strategy. Over the same period, Altice Europe has made outstanding progress in simplifying and strengthening its diversified capital structure,” said Drahi.
“The proposed ownership structure will enable an increased focus on executing our long-term strategy, and underlines my confidence and conviction in Altice Europe’s prospects. Altice Europe has a unique asset base, fully converged and fibre rich, with a leading position and nationwide fixed and mobile coverage across markets. With my ongoing personal involvement, Altice Europe will maintain the fundamental Altice Model at heart. I am excited to continue leading Altice Europe’s loyal management and their excellent teams. Altice Europe continues to have tremendous opportunities ahead.”
Jurgen van Breukelen, chairman of Altice Europe, said: “Right from the start of the process in early August, we have followed a careful, full and thorough process with all four independent non-executive directors and the non-conflicted executive director. Our focus has been on determining the best way forward for Altice Europe and its business, while safeguarding the interests of all stakeholders involved. This transaction will allow Altice Europe to more successfully and effectively achieve its goals in a private and fully owned environment, benefiting from the founder’s ongoing long term commitment to the business.”
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