Altice announced a plan to buy-out the minority shareholders in SFR, its French business, in a deal worth up to €2.4 billion, as well as a strategy to optimise its organisation following its acquisition of US cable player Cablevision.
The company said it “plans to make its core strategic, operational and technical capabilities available to its subsidiaries in a more centralised manner to maximise the powerful impact on their operational and financial performance”.
This comes “following its transformation into a leading transatlantic communications and media group with the closing of its acquisition of Cablevision”.
Among the benefits it expects is the coordinated development and launch of new products and services, and centralised procurement.
As part of the move, it also intends to take control of suppliers Parilis, which works in the areas of network deployment, upgrade and maintenance, and Intelcia, which works in customer support.
And it will launch Altice Studios, to create original movies and series, and Altice Channel Factory, to create new channels, “further extending its convergence strategy”.
“Our updated strategy will significantly strengthen our subsidiaries and put them into an even better competitive position to provide our customers with best-in-class services across all of our markets,” said Michel Combes, CEO of Altice.
Altice filed with the French markets regulator a plan to exchange SFR shares for Altice shares. Some 22.25 per cent of SFR is owned by shareholders other than Altice.
In a statement, the benefits of Altice shares over SFR ownership were outlined, including “diversification into higher growth markets with structural and competitive advantages, particularly the US”; exposure to efficiency potential from the enlarged group; and a retained exposure to the French market.
According to Bloomberg, the offer values the SFR stake not owned by Altice at €2.4 billion, and there is no minimum acceptance level. The offer places a small premium (2.6 per cent on the 2 September closing price) on SFR shares, although the percentage is bigger when compared to earlier periods.
The proposed transaction is expected to close in the fourth quarter, subject to approval by the French and Dutch market authorities.