Altice goes Dutch to help with future M&A

Altice, whose €10 billion ($11.2 billion) bid for French operator Bouygues Telecom was rejected this week, announced a restructuring that will see the company merge with its new Dutch company called Altice NV to strengthen its ability to make future acquisitions.

The existing holding company Altice SA will be replaced by the Dutch entity, which will have an enterprise value of €61.9 billion. Shareholders will vote on the proposal for what Altice described as a "cross-border merger" at an EGM to be held in July.

The move further underscores Altice's ambitions to expand its cable and mobile empire. CEO Dexter Goei said the group would "benefit from a powerful equity acquisition currency without prejudicing voting control of the company's founding shareholder group. This will further strengthen Altice's position in the next phase of value-enhancing growth."

Attempts to pick up more assets in France, where Altice recently secured mobile operator SFR to form Numericable-SFR, were thwarted this week after the Bouygues Group rejected the company's bid for its telecoms unit.

Altice has now confirmed that its offer for Bouygues Telecom valued the unit at €10 billion. It said it made the offer on June 3 and provided further details to the Bouygues board on June 21.

The company said that while it took note of the decision by the board to reject the offer, it "regrets that the board has not once, either through its advisers or through its management teams, sought any details or explanations from Altice regarding the offer before being presented to the board."

In a statement defending its approach, Altice stressed that the offer was "fully and unconditionally financed under commitment letters from BNP, JP Morgan and Morgan Stanley" and would have been funded through a mix of bank debt and equity. It also outlined the measures it had taken to secure approval of any deal by entering into negotiations with Iliad for the transfer of assets in Bouygues Telecom after closing.

Furthermore, Altice said it had made commitments on investments and jobs, and planned to fully participate in the auction on the 700 MHz frequencies scheduled for the end of this year.

Altice's efforts to consolidate the French market may have been foiled for now, but the company is known for its tenacity. "The offer remains on the table," a company official told Reuters.

For more:
- see this Altice statement on its new structure
- see this Altice statement defending the Bouygues Telecom offer
- see this Reuters article
- see this Bloomberg article
- see this separate Reuters article

Related articles:
Bouygues says 'non' to French consolidation, shuns Altice
Altice makes €10B offer for Bouygues Telecom
France sets €2.5B reserve price for 700 MHz auction
French mobile price declines slowed in 2014
France's operators sign accord to cover all mobile 'not spots' by 2020

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