Altice SA announced that it is going to purchase about 70% of the telecommunications company Suddenlink Communications. The decision has been taken by the company as Patrick Drahi, head of the French telecom group Altice, has embarked on an expansion into the United States.
On Wednesday, Altice revealed that the purchase has placed an enterprise value of about $9.1 billion on Suddenlink, which is currently the seventh-largest United States cable company. Apart from buying Suddenlink stake, Drahi's investment vehicle Altice had made a takeover approach for larger Time Warner Cable Inc. Earlier, merger of Time Warner Cable Inc. was cancelled in April, as per reports.
The Luxembourg-based Altice said in a statement, "Company will purchase 70 percent of Suddenlink with a combined debt and cash offer from existing owners BC Partners and CPP Investment Board, and company management."
The 51-year-old French billionaire, Drahi, has been planning to expand his telecommunications business to cable market of the United States. As television service in the country has come under pressure from online rivals, cable providers have been trying to get bigger.
In April this year, international mass media company, Comcast, which is also the biggest cable company in the US, called off its plan to acquire Time Warner Cable, which is at number two spot. The plan was cancelled due to regulatory hurdles, as per the reports. Meanwhile, Charter Communications Inc., which is another cable company in the US, has been working on a takeover of Bright House Networks LLC.
According to the reports, shares of Altice rose more than 7% to about 124.30 euros in Amsterdam, while Suddenlink was closely held. On Tuesday, Time Warner Cable' shares jumped slightly about 0.3% to $158 in New York.