Altice on hunt for bigger acquisitions
Arash Massoudi in London and Adam Thomson in Paris
Altice, the European cable and mobile group, is on the hunt for bigger takeover targets even though it has already splashed more than €28bn on acquisitions in the past 12 months.
Dexter Goei, chief executive, told the Financial Times the group would press ahead with its rapid expansion by taking advantage of cheap borrowing to challenge the region’s established telecommunications companies.
“We believe the whole telecom market in Europe will go through accelerated phases of convergence of fixed and mobile services and consolidation, especially among mobile operators,” said Mr Goei.
·
Altice saw “a pipeline of opportunities to continue doing what we have done in the last few years, just on a bigger scale”, he added.
The Amsterdam-listed company has emerged out of relative obscurity, becoming one of Europe’s most aggressive acquirers and a leading proponent of consolidation and convergence between cable, broadband, fixed-line and mobile services.
Last week, Altice made a €3.9bn offer to Vivendi of France to increase its 60 per cent stake in Numericable-SFR, the country’s second-biggest telecoms business, to 80 per cent. It has also expressed an interest in eventually acquiring Bouygues Telecom, France’s number three mobile operator.
Founded by Franco-Israeli entrepreneur Patrick Drahi, Altice has acquired a portfolio of telecom assets in France, Israel, Portugal, Belgium, Luxembourg and the Caribbean. Since its initial public offering in January 2014, it has amassed a market capitalisation of more than €20.5bn.
Mr Drahi owns nearly 60 per cent of the business, making him one of Europe’s wealthiest men. His shares are worth more than €12bn.
The company has hired a stable of investment bankers, such as Mr Goei, partly by offering them equity in the business.
“All of our employees, pushed three levels below CEO, are properly incentivised,” said Mr Goei, whose shares are worth €282m.
Altice’s push has coincided with greater political support for an easing of competition rules in Brussels after years of lobbying from industry heavyweights.
Companies such as Deutsche Telekom, Orange and Vodafone have argued that the region’s rules have hamstrung the industry, sapping investment in infrastructure and benefiting US and Asian rivals.
Altice has fashioned itself after Liberty Global, the world’s largest international cable company, which was founded by US mogul John Malone.
Mr Drahi once worked under Mr Malone after selling his small French cable business to UPC, which is now part of Liberty. Both companies operate with a higher amount of leverage than their peers to help fund their acquisitions.
In the past year Altice has bought Portugal Telecom for €7.4bn, adding the leading mobile operator to the two cable operators it owns in Portugal. Altice acquired Vivendi’s SFR, France’s number-two mobile operator, for €17bn and combined it with Numericable