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Patrick Drahi Closes $1.8 billion IPO for Altice

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Patrick Drahi / Getty

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Shares in Patrick Drahi’s cable and mobile telecoms company Altice are now trading on the Euronext Exchange in Amsterdam following the success of its planned IPO this morning.

After pricing the shares this morning at US$38.42 (Euros 28.25) per share, the shares traded today with the symbol ACT:AEX. The share reached a high during the day of US$40.6 (Euros 29.85), and closed at US$38.92 (Euros 28.62) per share, up about one and a half percent on the IPO price, indicating the shares were priced pretty much correctly.

Ten days ago French-Israeli telecoms entrepreneur Patrick Darhi’s, Luxembourg registered, operating holding company, Altice had commenced the process for this initial public offering of shares.

Depending on the final price obtainable, Altice itself was expected to offer a maximum of 30.3 million shares, and Drahi’s own investment holding company, Next LP, which owned Altice 100% was expecting to offer a maximum of 22.4 million shares as well. The price per share anticipated under the offering was expected to be somewhere within a range of between US$33.66 (Euros 24.75) and US$42.5 (Euros 31.25) per share.

As it turned out, this morning when the shares were priced and sold the price obtained was just above the middle of the expected range, at US$38.42 (Euros 28.25) per share. Gross proceeds of the offering were US$1.775 billion (Euros 1.305 billion) before counting any shares that may still be issuable under a 15% over allotment option granted to the Underwriters.

Altice logo
A total of 46.2 million shares were sold in the IPO, again not considering the Underwriters’ option. Altice itself sold from treasury just over 26.5 million shares in order to raise its planned US$1 billion (Euros 750 million), gross before fees and expenses of the offering of about Euros 26 million, in a very efficient transaction.

The net proceeds will therefore go into the Altice balance sheet and be available to reduce net indebtedness of the company. The balance of the shares for the offering came from the selling shareholder, as will any further shares to meet any shares needed under the Underwriters’ overallotment option as well.

If no Underwriters’ options are exercised, then with a total of about 202.6 million shares outstanding, 22.8% of Altice’s issued ordinary share capital are now held in public hands and constitute the free “float”. At today’s closing price after the first day of trading on Euronext this values the company’s total equity therefore at about US$7.9 billion (Euros 5.8 billion).

Goldman Sachs and Morgan Stanley were lead Underwriters for the offering.

After the successful pricing Patrick Drahi, Executive Chairman of Altice, said: “We are very happy to price our IPO with such strong interest from investors. This IPO has been a strategic priority for the group and I am very proud that the entrepreneurial cable company Altice has grown into the multinational cable business it is today.”

Patrick Drahi has indicated for a while that he is still in acquisition mode, and this vote of confidence in his group by the markets could now be a stepping-stone for further deals therefore.

Vivendi has reportedly been trying to spin out its French cell phone operator SFR for some time, which could be one potential target. Altice already owns 40% of French cable company Numericable, which also had its own successful IPO in November, so Drahi conceivably could use Numericable as a vehicle for a further French acquisition. However, frankly, merging Altice with Numericable itself would be the most direct form of action, and also the least harmful to the subsequent balance sheet.

Altice CEO Dexter Goei also spoke to reporters in Amsterdam, “There are opportunities in each one of our markets” adding, “We’re effectively in nine different regions or countries, so we’re looking at more than nine opportunities.”

For the moment Mr. Drahi himself is of course keeping his cards close to his chest, as he should, and we will have to wait and see what transpires.

About Patrick Drahi

Patrick Drahi was born in Paris to a Jewish family of North African descent. He studied engineering at the prestigious school for the French élites, L’École Polytechnique.

Subsequently, he worked at Philips where he advanced to the position of department head. He began investing privately in the early nineteen nineties – buying small cable companies in the Provence region of southern France.

He founded the company UPC France, then in 1999 sold his shares. In 2006 he bought the company back again through Altice, the cable company he by then owned, for one third of the price.

Altice later purchased cable companies in Luxembourg, Belgium, Portugal and the Dominican Republic. Drahi also owns 40% of Numericable, the largest cable company in France .

In 2009 he purchased interests in Israeli company HOT cable, and also in the MIRS mobile phone company there, which he bought from Motorola.

Patrick Drahi permanently resides in Geneva, and also has an apartment at the Rothschild 1 project in Tel Aviv.
With a personal net worth estimated at around US$1 billion, Drahi traditionally refrains from interviews and exposure to the media.




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