Altice does a USA spin off. Dividends propel shares
Patrick Drahi's company wants to separate the North-American unit from the Dutch branch. But it also wants to restructure its operations in Europe. The goal is to calm investors' fears.
Altice NV will separate Altice USA from the Dutch branch. This spin off, announced this Monday, will not be the only change. In Europe, the company also wants to restructure its operations, in an attempt to mitigate the fear investors have around Altice’s high debt, which have caused the price of shares to plummet in the past months. Altice NV wants to pay 1.5 billion euros in dividends.
“The separation will enable each business to focus more on the distinct opportunities for value creation in their respective markets and ensure greater transparency for investors”, is stated in the press release disclosed in Altice’s official website. “Altice NV aims to complete the proposed transaction by the end of the second quarter 2018 following regulatory and Altice NV shareholder approvals”, the same press adds.
The separation will enable each business to focus more on the distinct opportunities for value creation in their respective markets and ensure greater transparency for investors.
After the separation, the companies will be headed by different management teams. Patrick Drahi, founder of Altice, will continue being in charge of both companies. Drahi will take on the role of chairman of Altice Europa and of Altice USA.
In Europe, there will also be a restructuring of operations. Altice Europa will reorganize its structure which includes Altice France, Altice Internacional and the recently created Altice Pay TV. This includes “integrating Altice’s support services businesses into their respective markets and bundling Altice Europe’s premium content activities into one separately funded operating unit with its own P&L”.
In the same press release, Altice further stated that an agreement of principle has been signed in order to pay a 1.5 billion dollars’ dividend to all shareholders immediately after concluding this separation. The formal approval of the dividend should take place on the second quarter of 2018.
