Altice in Wonderland

13 June 2017 By Jennifer Saba Follow @jennifersaba

Entrepreneur Patrick Drahi is seeking a $23 bln valuation for his U.S. unit while giving investors almost no voice. With hefty debt and few assets to buy, it’s hard to see Altice achieving its grand ambitions. There are plenty of reasons to be a cord-never, financially speaking.

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Netherlands-based Altice plans to float 7 percent of its U.S. cable holdings, Altice USA, at a price range of $27 to $31 per share, raising up to $1.6 billion, according to a June 12 filing. Altice USA will receive $375 million in proceeds because three-quarters of the shares will be offered by owners BC Partners and Canadian Pension Plan Investment Board.

At the high end of the range, Altice USA will have a market value of $22.9 billion. It has $20.6 billion in net debt.

Altice USA will have three classes of stock. The firm is selling 51.8 million shares of Class A common stock including the underwriter’s option. Class A shareholders will be entitled to one vote. Class B shareholders will be entitled to 25 votes per share. Class C shareholders, should Altice plan to offer the shares, will get no vote.

Upon completion of the IPO, Altice USA’s parent will hold 98.5 percent of voting power. Altice USA was created when its parent bought cable companies Suddenlink and Cablevision in 2015 for a total of $28 billion.

The firm will be listed on the New York Stock Exchange under the symbol “ATUS.” JPMorgan, Morgan Stanley, Citigroup and Goldman Sachs are the lead underwriters.

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