>>> What to look at today - 18th of September 2015

Dow-0.39% S&P-0.26% Nasdaq+0.10% Russell+0.44% VIX 21.76
US Market closed lower after long awaited FOMC Meeting, policy statement from the Federal Reserve was virtually a carbon copy of the previous directive. The FOMC acknowledged positive labor market conditions in the U.S., but indicated that concerns related to an economic slowdown in China have outweighed the domestic positives. Ms. Yellen stressed that these developments have weighed on the inflation outlook, contributing to today's decision to maintain status quo. Furthermore, Ms. Yellen emphasized that the expected rate path is more important than the first rate hike, indicating that the Committee expects to see rate normalization by 2018. Hearing ‘2018' in that context was music to the market's ears, inviting a stampede of buyers in stocks while Treasuries spiked to highs with the 10-yr yield falling ten basis points to 2.20%. The post-FOMC move higher was followed by a dive to new lows, with the reversal paced by the financial sector (-1.4%), which settled in the red as bank stocks responded to rates remaining lower for longer. The sector accelerated its decline as Fed Chair Yellen responded to a question about the possibility that the U.S. falls into a Japan-like deflationary trap. To little surprise, Ms. Yellen said that such a scenario is not anticipated at this time. Technology also weighted on the market, ORCL -4%. industrials (-0.5%), energy (-0.1%), and materials (-0.5%) succumbed to the afternoon selling pressure. Volume were in line with acerage at 975mil shares. US After Hours PDEX +25.9%, AKS +12.8%, LQ -5.1%, ADBE -2.4% following earnings/guidance, VBLT +15.7% on Phase 2 results...China put out its housing prices that continued to recover. Across top 70 cities prices m/m were +0.6% (3rd straight increase) v +0.2% prior, while y/y the decline slowed to -2.3% v -3.7% prior (12th straight decline). HKMA chief Chan still expressed concern over local economy and property market, just as China Pres Xi reiterated the economy is resilient, with capacity to maintain medium to high growth rate in long term. In Japan, the BOJ released the minutes of its Aug meeting that saw members agree Japan economy will continue modest recovery and noted inflation expectations on the rise. Sentiment produced little market reaction, as it follows a more recent policy statement this week where the BOJ cut its assessment of exports and output. Also of note, high-profile former MoF official Sakakibara said continued Yen weakness is unlikely, and that there's greater chance of a move to ¥115-120 range then to ¥125 level.

Nikkei -1.53% Hang Seng +0.53% Shanghai +0.93%

Eur$ 1.1412 CNY 6.3622 JPY 119.70 GBP 1.5581 EURCHF 1.0972 RUB$65.6420 WTI $46.74 9(-0.34%)

S&P +0.03% EuroStoxx -0.35% Dax -0.40% SMI-0.70%

Macro :
- FOMC See Longer-Run Median Federal Funds Rate at 3.50%
- Yellen May Emulate Taper Template and Raise Rates in December
- It’s Party On in Credit Markets as Fed Stays at Zero for Longer
- China Home-Price Growth Widens to More Cities Amid Rate Cuts
- The Brazilian Dealmaker Who Wowed Buffett Is Reshaping the World

Keep an eye on :
- ABG/P SM : Abengoa Loans Said to Fail to Draw Buyers Even at 60% Discount
- ABG/P SM : Blackstone, Cerberus May Inject Cash Into Abengoa: Expansion
- ABI BB : Belgian Stock Regulator to Analyze AB InBev Option Trade: Tijd
- AC FP : Colony Capital in Talks to Buy French Auto Chain: Reuters
- ATL IM : Atlantia Said in Advanced Talks to Sell Stake in Rome Airport
- ATC NA : Altice Will Do More U.S. Cable Acquisitions, Alliances: Drahi
- ATC NA : FCC Considering CVC/Altice Merger in ‘Open, Fast’ Process
- BAYN GY : Bayer Mulls Legal Steps on Xarelto Copy Application in U.S.: FAZ
- BBVA SM : BBVA mandates N+1 to sell its Italian consumer financing unit BBVA Finanzia
- BMW GY : BMW Sees FX, Commodity Benefit of Three-Digit Millions: Boersen
- IMT LN : Could be a target for Japan Tobacco
- KNEBV FH : Kone CEO Sees Good Growth Potential in China in Few Years: DI
- LLOY LN : Lloyds May Be Investigated by U.K. Serious Fraud Office: FT
- SAB LN : Altria Said to Hire Credit Suisse, Perella for ABI-SAB
- SHP LN : Shire CEO Says Can’t Promise Lifitegrast Approval by Pdufa Date
- VNF1R LR : Vitol Buys 43.3% Stake in Ventspils Nafta for 1.77 Euros a Share
- VOLVB SS : Volvo Cars to Spend EU200m on CMA Platform in Ghent Plant: Tijd

>>> Europe : Brokers Upgrades & Downgrades - 18th of September 2

>>> Up
*ADIDAS RAISED TO BUY VS HOLD AT HSBC, PT EU84
*ALTICE RAISED TO HOLD VS REDUCE AT KEPLER CHEUVREUX
*BANCO SANTANDER RAISED TO BUY VS NEUTRAL AT CITI
*BOLIDEN RAISED TO OUTPERFORM VS NEUTRAL AT EXANE
*CONTINENTAL RAISED TO BUY VS NEUTRAL AT GOLDMAN
*DNB ASA RAISED TO BUY AT HSBC
*HEINEKEN RAISED TO BUY AT HSBC
*IMMOFINANZ RAISED TO BUY VS HOLD AT SOCIETE GENERALE
*KORIAN RAISED TO BUY AT HSBC
*OXFORD INSTRUMENTS RAISED TO HOLD VS SELL AT BERENBERG

>>> Down
*DEUTSCHE PFANDBRIEFBANK RATED NEW NEUTRAL AT JPMORGAN
*KAZ MINERALS CUT TO UNDERPERFORM VS NEUTRAL AT EXANE
*NYRSTAR CUT TO UNDERPERFORM VS NEUTRAL AT EXANE
*ROTORK CUT TO REDUCE AT NOMURA

>>> PT Change


>>> Initiation
*GLENCORE RESUMED EQUALWEIGHT AT MORGAN STANLEY, PT 217P
*SAFT GROUPE RATED NEW HOLD AT SOCIETE GENERALE, PT EU32

>>> Call

(Les Echos) La Bourse de Paris fait évoluer son « fixing »

Pour éviter les fraudes, les fixations des prix d'ouverture et de clôture des actions s'effectueront à un moment choisi au hasard dans une période de 30 secondes.
C'est une petite révolution dans les procédures d'Euronext. L'opérateur boursier paneuropéen a en effet décidé, à l'instar de ses grands homologues, de déterminer de façon aléatoire le moment où sont établis les cours d'ouverture et de clôture des actions, cotées en continu sur ses marchés.
A l'heure actuelle, en effet, le processus est toujours le même. Les ordres des investisseurs peuvent être passés « avant Bourse », puis éventuellement modifiés ou annulés de 7 h 15 à 9 h 00. Pendant cette période, la comparaison de livres d'ordres permet de donner un prix indicatif des actions sur les marchés Euronext. Mais c'est au moment exact de l'ouverture, lorsque tous les ordres sont définitifs, qu'est fixé le prix d'ouverture. Celui-ci servira de référence toute la journée pour les marchés. Pour déterminer le prix de clôture, la même procédure s'applique. Les ordres sont recueillis de 17 h 30, heure de fin des échanges quotidiens, à 17 h 35. A cet instant précis, les cours de clôture sont arrêtés. Ces prix sont d'une importance capitale, car ils sont notamment utilisés pour le calcul de la progression des indices ou de l'évolution de la valeur du portefeuille des investisseurs.
Le problème, c'est que ces procédures sont bien trop prévisibles. « L'heure du "fixing" [la détermination des cours, NDLR], étant parfaitement connue, il existe un risque théorique que certains acteurs de marchés cherchent à manipuler le cours d'ouverture et de clôture », explique Simon Gallagher, responsable marchés au comptant actions d'Euronext.
Agissements frauduleux
Concrètement, un acteur mal- intentionné pourrait passer des ordres sur un volume important de titres pendant la période de fixation du cours. S'il souhaite jouer un titre à la hausse, par exemple, il va passer un gros ordre à l'achat avant l'ouverture. Il va ainsi faire monter le cours indicatif de l'action sur lequel les autres acteurs vont se positionner. Puis au tout dernier moment avant la fixation du cours, il annule son ordre. Le prix d'ouverture restera tout de même élevé. « Ce type d'agissements fait déjà l'objet d'une surveillance de la part de notre équipe de contrôle et de l'Autorité des marchés financiers, poursuit Simon Gallagher. Néanmoins, nous avons décidé d'adopter en la matière les bonnes pratiques en vigueur chez les grands opérateurs boursiers européens. »
A l'instar de Londres et Francfort

Bientôt, en effet, la détermination des cours d'ouverture et de clôture n'aura plus lieu à heure fixe, mais à un instant choisi au hasard dans une période de 30 secondes, entre 9 h 00 et 9 h 00 trente secondes, et entre 17 h 35 et 17 h 35 et trente secondes. Cette durée est la même que celle qui a été retenue par le London Stock Exchange ou la Bourse de Francfort. « Si l'acteur de marché mal-intentionné ne connaît plus avec précision le moment où le fixing a lieu, il ne pourra pas annuler son ordre à temps, et devra donc l'exécuter, explique Simon Gallagher. Ce risque devrait donc être dissuasif. » Les ultimes tests ayant été effectués, la nouvelle procédure entrera en vigueur le 28 septembre.

(Less Echos) Altice : un empire bâti sur une montagne de dettes et géré au corde

Altice : un empire bâti sur une montagne de dettes et géré au cordeau

Décodage des montages financiers d’une galaxie Drahi forte de 52 milliards d’euros d’acquisitions. Et de leurs risques.
Y-a-t-il une méthode Drahi, derrière des montages à première vue extrêmement sophistiqués ? Il y a des ingrédients de base communs qui relèvent de l’univers des LBO, dans les 52 milliards d’euros d’acquisitions qu’il a réalisées en environ un an et demi . En résumé, il s’agit de faire des emplettes de taille, en faisant porter la dette sur les actifs acquis. « Mais, à la différence d’autres groupes, il n’y a pas de cascades de holdings », relève Jean-Michel Salvador, analyste chez AlphaValue.
Restructuration de dettes
Parallèlement, Altice restructure en permanence sa dette. Pour le rachat de SFR , par exemple, Patrick Drahi a contracté une dette long terme dont le premier anniversaire de remboursement est fixé à mai 2019. Seul le paiement des intérêts est dû d’ici là. Et la dette est à taux fixe : cela coûte plus cher, mais c’est le prix de la tranquillité. Mieux : pour financer le rachat des 20 % de Vivendi dans SFR qui lui manquaient, l’hommes d’affaires a refinancé il y a un mois deux tranches qui étaient à sept ans en les décalant à dix, réussissant, au passage, à faire baisser le taux d’intérêt à 3,3 %.
Des ratios de dette élevés
La grande force d’Altice est de parvenir à faire des acquisitions dans des secteurs à forte visibilité, et de savoir ensuite restructurer. Selon les calculs d’Alphavalue, la dette consolidée de l’ensemble Altice devrait être autour de 45 milliards d’euros en fin d’année, pour un Ebitda d’environ 9 milliards, soit un ratio de 5 environ. Un chiffre au-dessus de la moyenne du secteur des télécoms en Europe (autour de 2,5 ou 3).« On a rarement vu de tels ratios dans cet univers. Patrick Drahi fait le pari que la croissance de l’Ebitda de l’entité acquise - excédent brut d’exploitation - sera suffisante pour ne pas faire exploser ses ratios de dette. En clair, qu’il va arriver à mieux gérer Cablevision que ses prédécesseurs », explique Jean-Michel Salvador. Certes, les ratios dette nette/Ebitda sont élevés mais, autrefois, l’homme d’affaires faisait bien pire. Quand il a racheté Noos, il a « leveragé » 10 fois l’Ebitda !
Jusqu’où ira-t-il ?
Jusqu’à quel point Altice peut-il tenir ? « Si on stoppait notre développement, en cinq ans, on n’aurait plus de dettes. Mais cela serait stupide car cela voudrait dire qu’Altice n’aura pas grandi pendant cinq ans », indique-t-on chez Altice. Les Cassandre, eux, ont encore en mémoire la galaxie Messier, au début des années 2000, qui avait explosé en plein vol, à force d’acquisitions. « Drahi a une vraie capacité de conviction, est très habile et sait générer des synergies. Il a la confiance des investisseurs, des banquiers, et du marché, ce qui créé un cercle vertueux. Tant qu’il l’aura, il pourra continuer dans cette voie », résume Vincent Maulay, chez Oddo.
Le « deal » SFR a montré sa capacité à enivrer les marchés financiers : il a réussi à réunir 100 milliards de dollars de demandes, alors qu’il avait besoin de dix fois moins ! Du jamais vu dans la tech. Aujourd’hui, les banques se précipitent à sa porte, au point qu’elles ne lui imposeraient plus de clauses lui interdisant d’aller au-delà d’un certain multiple d’endettement...
Mais des risques guettent

Plusieurs éléments pourraient toutefois venir gripper la machine : notamment une brusque remontée des taux d’intérêt , même si Altice a cherché à limiter sa sensibilité aux taux. Autre risque : une récession mondiale marquée, plombant les bénéfices des sociétés. Patrick Drahi a sûrement encore en mémoire la faillite de Lehman Brothers en 2008 qui a fait violemment tanguer Numericable, réputé alors proche de la faillite. Mais, là encore, son exposition de plus en forte dans une économie solide, les Etats-Unis, pourrait le préserver.
50 milliards d’euros de plus
De l’avis de spécialistes, Altice peut donc encore grossir. D’après les calculs d’Oddo, il aurait la capacité de faire encore pas moins de 50 milliards d’euros d’augmentation de capital, sans que Patrick Drahi ne perde le contrôle, g râce à la modification de la structure de son capital réalisée en août.

>>> Asian Update

Asian Mid-session Update: FOMC unnerves investors with a dovish hold


***Economic Data***
- (NZ) NEW ZEALAND SEPT ANZ CONSUMER CONFIDENCE INDEX: 110.8 V 109.8 PRIOR; M/M: +0.9% v -3.6% PRIOR
- (NZ) NEW ZEALAND AUG ANZ JOB ADVERTISEMENTS M/M: -1.7% V 0.0% PRIOR
- (KR) South Korea Aug PPI M/M: -0.5% v -0.4% prior; Y/Y: -4.4% (13th straight decline) v -4.0% prior
- (US) NORTH AMERICA AUG SEMI BOOK/BILL RATIO: 1.06 V 1.02 PRIOR; 2nd month above parity

***Index Snapshot (as of 02:30 GMT)***
- Nikkei225 -1.3%, S&P/ASX +0.4%, Kospi +0.9%, Shanghai Composite -0.2%, Hang Seng +0.5%, Dec S&P500 +0.1% at 1,980

***Commodities/Fixed Income***
- Dec gold +0.9% at $1,127/oz, Oct crude oil -0.2% at $46.80/brl, Dec copper -0.5% at $2.44/lb
- (CN) China MOF sells 1-yr bills, avg yield 2.31%
- USD/CNY: (CN) PBoC sets yuan mid point at 6.3607 v 6.3670 prior setting; strongest Yuan setting since Sept 7th
- (JP) BOJ offers to buy ¥400B in 1-3yr JGBs, ¥400B in 3-5yr JGBs, and ¥20B in inflation-linked JGBs
- (AU) Australia MoF (AOFM) sells A$800M in 2.75% 2019Bonds; avg yield: 2.0313%; bid-to-cover: 3.92x

***Market Focal Points/FX***
- Going into Thursday's decision, analysts were largely divided on whether the Fed would outright raise rates for the first time in 9 years or hold with a more clearly expressed intentions for tightening. Few were expecting a hold with a more dovish bias, but that is precisely what the statement and the accompanying projections contained. Despite acknowledging continued improvement in labor, the Fed emphasized global uncertainty, slowdown in China, the strength of USD, and inflation "nowhere near" target. Economic Forecast saw cuts in GDP and PCE inflation outlook, and the "dot chart" saw median rate for 2016 and 2017 reduced by 25bps, and the long run by 30bps to 3.50%. Also telling, 2015 outlook now saw 13 out of 18 officials anticipate a liftoff - down from 15 prior - even though Chair Yellen maintained every remaining meeting in 2015 would be live for an increase.

- Market reaction was mixed, as Treasuries rallied particularly on the short end and the yield curve steepened. US stocks initially spiked up but then ended at levels below pre-FOMC. USD was down sharply across the board, falling over 100pips below 119.90 in USD/JPY and through 1.1440 in EUR/USD. Commodity FX also initially spiked up but retreated in the waning hours of the US session. Asian markets are now tracking that caution as investors ponder whether the dovish tilt to the Fed outlook implies more speedbumps ahead.

- China put out its housing prices that continued to recover. Across top 70 cities prices m/m were +0.6% (3rd straight increase) v +0.2% prior, while y/y the decline slowed to -2.3% v -3.7% prior (12th straight decline). HKMA chief Chan still expressed concern over local economy and property market, just as China Pres Xi reiterated the economy is resilient, with capacity to maintain medium to high growth rate in long term.

- RBA Gov Stevens also straddled both sides of the fence, noting some improvement in non-mining sector, but overall economic growth below levels previously projected. AUD/USD was little changed on Stevens comments, even as he added that further decline in AUD would create a serious inflation problem as the currency has already made a big adjustment. On Australia's political front, approval rating for the ruling Coalition has topped that of opposition for the first time in 16 months in the wake of leadership transition this week.

- In Japan, the BOJ released the minutes of its Aug meeting that saw members agree Japan economy will continue modest recovery and noted inflation expectations on the rise. Sentiment produced little market reaction, as it follows a more recent policy statement this week where the BOJ cut its assessment of exports and output. Also of note, high-profile former MoF official Sakakibara said continued Yen weakness is unlikely, and that there's greater chance of a move to ¥115-120 range then to ¥125 level.

***Equities***
US equities / ADRs:
- AKS: Guides Q3 -$0.07 to -$0.02 v -$0.26e; cites higher shipments and lower costs; +13.2% afterhours
- TXN: Increases dividend 12% to $0.38 from $0.34 and authorizes $7.5 billion in share repurchases (15% of market cap); +1.0% afterhours
- ADBE: Reports Q3 $0.54 v $0.49e, R$1.22B v $1.21Be; Guides Q4 $0.56-0.62 v $0.65e, R$1.275-1.325B v $1.37Be; -2.1% afterhours
- LQ: Cuts FY15 pro forma adj EBITDA $393-400M, RevPAR growth +3.5-4.5% (prior $398-404M, RevPar +4.5-5.5%); accelerates $100M of $200M share repurchase program (4% of market cap); -5.4 % afterhours

Notable movers by sector:
- Consumer discretionary: Sydney Airport SYD.AU +1.7% (Aug result); Asics Corp 7936.JP -5.3%(lowers guidance)
- Financials: Premier Investments PMV.AU -1.4% (FY15 result); Seven & I Holdings 3382.JP +2.8% (speculation on Q2 and store close); Cheung Kong Property Holdings 1113.HK +2.0% (guidance); China Merchants Land 978.HK +7.5% (China Merchant Property's integration); Biostime International 1112.HK +28.0% (acquisition)
- Industrials: Boral BLD.AU +1.5% (enters into settlement); Mitsubishi Motors 7211.JP -1.3% (vehicle recalls)
- Technology: Veda Group VED.AU +0.1% (Equifax shows interest to acquire)
- Materials: Arrium ARI.AU -1.1% (update on bid for unit)
-Energy: Woodside Petroleum WPL.AU -0.7% (speculation to consider raising debt)
- Utilities: SDIC Power Holdings Co 600886.CN -10.0% (private placement)

>>> US After Hours Summary: PDEX +25.9%, AKS +12.8%, LQ -5.1%, A

After Hours Summary: PDEX +25.9%, AKS +12.8%, LQ -5.1%, ADBE -2.4% following earnings/guidance

After Hours Gainers:

Companies trading higher in after hours in reaction to earnings: PDEX +25.9%, AKS +12.8%

Companies trading higher in after hours in reaction to news: VBLT +15.7% (announced that complete Phase 2 data on VB-111, in combination with Bevacizumab will be presented at the European Society for Medical Oncology's (ESMO) European Cancer Congress), RXDX +1.5% (announced initiation of Phase 1/1b clinical trial of RXDX-107 in patients with locally advanced or metastatic solid tumors), TXN +1.0% (increased its quarterly cash dividend by 12%, to $0.38/share from $0.34/share; authorized the repurchase of $7.5 billion in common shares), ARW +0.7% (announced authorization for an additional $400 million in repurchases, via its common share repurchase program)

After Hours Losers:

Companies trading lower in after hours in reaction to earnings: LQ -5.1%, ADBE -2.4%

Companies trading lower in after hours in reaction to news: AI -1.9% (reduced its quarterly dividend to $0.625/share from $0.875/share), KGC -1.2% (lowered guidance for all-in sustaining cost per gold equivalent ounce sold to $975-1025 from $1000-1100; lowers CapEx guidance to $650 mln from $725 mln), MTGE -0.5% (lowered quarterly dividend to $0.40/share from $0.50/share, says it repurchased 1.2 mln shares in Q3)

>>> SABMiller/AB InBev requires clear US exit, attorneys say

SABMiller/AB InBev requires clear US exit, attorneys say

Following Anheuser-Busch InBev’s (NYSE:BUD) 2013 acquisition of Grupo Modelo, the Department of Justice (DoJ) will not allow the global beer giant to pick up additional US market share, antitrust attorneys said.

Belgium-based AB InBev confirmed on 16 September its intention to pursue SABMiller (LON:SAB). No further details regarding the terms of the proposed combination of two of the world’s largest beer makers have been released. SABMiller would be open to engaging in talks, media reports have said. A spokesperson for AB InBev declined to comment.

SABMiller owns a majority stake in the MillerCoors joint venture, which brews beers under Miller and Coors brands in the US. A deal with InBev would give the combined company a market share of more than 70% in the US.

Based on such a high level of market concentration, InBev will have to divest the joint venture to secure US antitrust clearance, according to two antitrust attorneys with knowledge of the industry and Mike Mazzoni, senior partner at consultancy Seema Interational.

The DoJ already views the US beer market as susceptible to coordinated effects, the two antitrust attorneys said. That’s in part because competitors such as AB InBev and SABMiller’s MillerCoors typically follow each other in terms of price, with the former as the price leader, the two antitrust attorneys and Mazzoni said.

AB InBev “can’t get any bigger in the US. Period. End of story,” the first antitrust attorney said.

In 2013, the DoJ found that Mexican brewer Modelo’s Corona brand acted as a so-called maverick in the US, providing a destabilizing force for beer prices. To complete the deal, InBev agreed to sell the US rights and capacity to produce Modelo beer to Constellation Brands (NYSE:STZ).

“This deal only happens because SABMiller will transfer their interest in MillerCoors and exit the joint venture,” the first antitrust attorney said.

Under the JV agreement, Molson Coors Brewing (NYSE:TAP) has a right of first refusal to buy SABMiller’s interest in MillerCoors.

SABMiller currently receives 58% of MillerCoors’ profits, while Molson Coors (MCBC) gets 42%, according to MCBC’s most recent 10-K filing with the US Securities and Exchange Commission (SEC).

MillerCoors was formed in July 2008. As the second-largest brewer by volume in the US, MillerCoors accounted for approximately 27% of the total US brewing industry in 2014, according to an SEC Filing. That figure excludes exports.

MCBC’s entire US segment consists of and results from the joint venture with SABMiller, according to its 10-K. In the US, MillerCoors core brands include Coors Light and Miller Lite, as well as Blue Moon, Coors Banquet, Keystone Light and Miller High Life, among others, according to the 10-K.

There are also some imports under the MillerCoors joint venture, including Grolsch. Grolsch is owned between MCBC and Royal Grolsch, a member of the SABMiller group, according to the 10-K. The merging parties could transfer control of imports to MCBC, too, the first antitrust attorney said.

Divesting SABMiller’s interest in MillerCoors to MCBC would preserve the competitive status quo in the US, the second antitrust attorney said. The DoJ typically defines this market as “all-beer,” while some subcategories can exist such as sub-premium, premium, super premium and high-end, the first and second antitrust attorney said.

Yet the DoJ has also acknowledged that the lines between those subcategories and the various brands are not explicitly clear, the second antitrust attorney said. In the tie-up of AB InBev and Modelo, the DoJ found a lot of switching and competitive interaction between Corona and certain Budweiser products, even though the former was considered more high-end, that attorney explained.

“Then they alleged the all-beer market, as opposed to a separate market for premium beers,” the second antitrust attorney said.

In any case, regulators will examine the extent to which the prices of AB InBev brands and SABMiller brands constrain each other in various US markets, the third antitrust attorney said. “The interesting thing is that drinking habits are all different,” that attorney said. “The short-cut is, what are two or three of your favorite beers? Then, how many of these guys have an interest in them?”

>>> Altice plans Cablevision network rebuild to support equity raise

Merger Market

Altice plans Cablevision network rebuild to support equity raise - chairman

* Growing dissension among Dolan family members led to deal
* Will continue to look at acquisitions if they present themselves

Altice (AMS: ATC) will look to lay fiber to the curb, or the last amplifier, in a network rebuild that it estimates will take five years, said Altice Chairman Patrick Drahi.

This new build-out will allow the company to grow EBITDA, a prospect it hopes will underpin investment in the company’s planned equity raise, he told this news service on the sidelines of Goldman Sachs Communacopia conference this afternoon.

The European cable and wireless company said Thursday it had entered into a definitive agreement to acquire US-based Cablevision Systems Corporation (NYSE: CVC) for USD 34.90 in cash per share, in a deal valued at USD 17.7bn.

As part of the deal, the Amsterdam-listed telco investment vehicle will raise approximately USD 2bn in equity financing, with potential private equity investors BC Partners and CPP Investment Board participating in the funding. The PE firms have the option to participate for up to 30% of Cablevision’s equity.

The Mergermarket Group, publisher of this news service, is a BC Partners portfolio company.

Drahi told investors at the Goldman Sachs event that Altice is aiming to increase Cablevision’s EBITDA margins from 32% currently to 40% over time. He also told the US audience of his margin successes in France, Portugal and Israel.

An industry banker said "growing dissension" among the controlling Dolan family pushed Cablevision toward a sale. The banker added that the company has tried in the recent past to elicit interest from Comcast (NASDAQ: CMCSA) and Time Warner Cable (NYSE: TWC), as either player would be able to consolidate the metropolitan New York cable market, the nation's largest.

A Cablevision spokesperson did not immediately respond to a request for comment.

A person with knowledge of Time Warner Cable's thinking on the matter told this news service in May that it might have given strong consideration to an acquisition of Cablevision five years ago, but since then Cablevision's footprint has become heavily penetrated by telecom giant Verizon Communications' (NYSE: VZ) FiOS video service.

The industry banker said Cablevision CEO James Dolan is now more interested in The Madison Square Garden Company (NYSE: MSG) and its related assets than trying to expand Cablevision's cable franchise. MSG's board granted final approval for a spinoff of its entertainment and sports businesses into a separately traded entity last week.

Meanwhile, Altice CEO Dexter Goei told this news service, also on the sidelines of the Goldman Sachs conference, that the company would not need to wait to digest Cablevision to make another deal if the opportunity presents itself.

Asked if Altice would be able to pursue other transactions before the expected close of the Cablevision deal in the first half of 2016, Goei said the company would stay proactive. In the current market, lining up concurrent deals is key, Goei, added.

The Cablevision transaction comes on the heels of Altice's May 2015 deal to acquire Suddenlink Communications, the seventh-largest cable group in the US, for USD 9.1bn.

Taken together with the Suddenlink assets, Altice's deal for Cablevision will make it the fourth-largest cable operator in the US, the company said Thursday.

Goei reiterated comments made earlier in the day by CFO Dennis Okhuijsen that Altice expects to complete a USD 2bn capital raise before the Cablevision deal has been consummated.