Cable Operator Altice USA Unveils Terms of $1.35B IPO

Pay TV and telecom giant Altice on Monday unveiled key terms of the planned initial public offering of its Altice USA cable unit, which operates the former Cablevision Systems business and owns a majority stake in smaller U.S. cabler Suddenlink.

Altice USA, led by CEO Dexter Goei, has launched an IPO of more than 46.55 million shares of Class A common stock, which is expected to be priced at $27 to $31 per share. That would value the IPO at around $1.35 billion at the midway mark.

The IPO is seen as giving the company, already the fourth-largest U.S. cable operator behind Comcast, Charter Communications and Cox Communications, stock that it could use to help it make further acquisitions.

Some analysts have suggested that privately held Cox Communications and smaller operators could be a future focus for it. “We expect Altice USA will be active in system consolidation,” Telsey Group analyst Tom Eagan wrote in a report at the end of May. “The Cox and Mediacom systems are likely targets.” Cox has consistently said it is not for sale.

Of the shares of Altice USA common stock included in the offering, more than 12 million shares will be offered by Altice USA, nearly 21 million by funds advised by BC Partners and more than 13.5 million shares will be offered by entities affiliated with the Canada Pension Plan Investment Board.

“The holders of our outstanding Class B common stock will hold approximately 98.0 percent of the voting power of our outstanding capital stock immediately following this offering,” the company highlighted. Those holders are various “Altice parties,” led by a personal holding company of founder Patrick Drahi.

Altice USA has applied to list its stock on the New York Stock Exchange under the ticker symbol “ATUS.”

J.P. Morgan, Morgan Stanley, Citigroup and Goldman Sachs are acting as joint book-running managers for the proposed offering, which the company first filed for in April.