European telecoms company Altice announced today (September 17th) it would buy US cable TV firm Cablevision Systems for about $10 billion (£6.4 billion), in a deal that will create the number four cable operator in the US market. Including Cablevision's debt, the deal has an enterprise value of $17.7 billion.
Altice said it would pay $34.90 in cash for each Cablevision share. French tycoon Patrick Drahi, the founder of Altice, said: "As a family business, we are proud to be entrusted by the Dolan family with the ownership of Cablevision and look forward to continuing the pioneering path they have paved for us. The strategy of Altice in the large and highly strategic US market is reinforced with the acquisition of Cablevision."
The firm's chief executive, James Dolan, added: "Since Charles Dolan founded Cablevision in 1973, the Dolan family has been honoured 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."
Altice on a spending spree
The acquisition is part of Altice's efforts to expand in the US, with the comany planning to earn half of its revenue in the United States in a bid to diversify risk.
It has bought several telecom and cable companies in a 36-billion-euro deal spree in the past 18 months, including US regional cable firm Suddenlink Communications for $9.1 billion.
The group is the parent company of French cable operator Numericable, and has already invested in 2014 in daily newspaper Libération. Patrick Drahi also masterminded Numericable's acquisition of larger mobile rival SFR and is in the process of acquiring Portugal Telecom.
Since it first listed last year, Altice’s share price has gone up 320 per cent and the group has a market capitalisation of just under €30 billion.
StoneX Financial Ltd (trading as “City Index”) is an execution-only service provider. This material, whether or not it states any opinions, is for general information purposes only and it does not take into account your personal circumstances or objectives. This material has been prepared using the thoughts and opinions of the author and these may change. However, City Index does not plan to provide further updates to any material once published and it is not under any obligation to keep this material up to date. This material is short term in nature and may only relate to facts and circumstances existing at a specific time or day. Nothing in this material is (or should be considered to be) financial, investment, legal, tax or other advice and no reliance should be placed on it.
No opinion given in this material constitutes a recommendation by City Index or the author that any particular investment, security, transaction or investment strategy is suitable for any specific person. The material has not been prepared in accordance with legal requirements designed to promote the independence of investment research. Although City Index is not specifically prevented from dealing before providing this material, City Index does not seek to take advantage of the material prior to its dissemination. This material is not intended for distribution to, or use by, any person in any country or jurisdiction where such distribution or use would be contrary to local law or regulation.