Altice To Spin Off U.S. Unit And Revamp European Operations

(RTTNews) - Altice N.V. said that its board has approved plans for the separation of Altice USA Inc. (ATUS) from Altice NV, which will be renamed "Altice Europe". Altice NV aims to complete the proposed transaction by the end of the second quarter 2018 following regulatory and Altice NV shareholder approvals.

The separation is to be effected by a spin-off of Altice NV's 67.2% interest in Altice USA through a distribution in kind to Altice NV shareholders. Following this proposed transaction, the two companies will be led by separate management teams. Patrick Drahi, founder of Altice, will retain control of both companies through Next and is committed to long-term ownership. Post-separation, Drahi will serve as President of the Board of Altice Europe and Chairman of the Board of Altice USA.

Drahi's holding company will have at least 51 percent of the voting power of the U.S. company after the transaction.

Simultaneously, the Board of Directors of Altice USA approved in principle the payment of a $1.5 billion cash dividend to all shareholders immediately prior to completion of the separation. Formal approval of the dividend and setting of a record date are expected to occur in the second quarter of 2018.

The payment of the dividend will be funded with available Optimum revolving facility capacity and a new financing at Optimum. Altice NV will use €625 million of its €900 million of proceeds received in the Altice USA dividend to prepay a portion of the Altice Corporate Financing facility and will retain €275 million on balance sheet.

In addition, the Board of Directors of Altice USA has authorized a share repurchase program of $2 billon, effective following completion of the separation.

Altice Europe will reorganize its structure comprising Altice France (including French Overseas Territories), Altice International and a newly formed Altice Pay TV subsidiary. This will include 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. Altice NV's ownership of Altice Technical Services US will be transferred to Altice USA prior to completion of the separation for a nominal consideration.

Altice founder Patrick Drahi said, "The separation will allow both Altice Europe and Altice USA to focus on their respective operations and execute against their strategies, deliver value for shareholders, and realize their full potential. Both operations will have the fundamental Altice Model at their heart through my close personal involvement as well as that of the historic founding team."

Altice Europe and Altice USA will be managed by two distinct management teams, focused solely on the performance in their respective markets.

Both management teams will benefit from the strategic leadership of founder and controlling shareholder Patrick Drahi, who will serve as President of the Board of Altice Europe and Chairman of the Board of Altice USA. Armando Pereira will serve as COO of Altice Europe and serve as strategic advisor to Altice USA for all operations.

Dennis Okhuijsen will serve as CEO and a Director of Altice Europe with all corporate functions and country managers reporting into him. He will report to Patrick Drahi. Dexter Goei will continue to serve as CEO and a Director of Altice USA. He will report to Patrick Drahi.