|Bid||18.59 x 16000|
|Ask||18.60 x 47400|
|Day's Range||18.56 - 18.62|
|52 Week Range||16.00 - 24.14|
|Beta (5Y Monthly)||0.86|
|PE Ratio (TTM)||N/A|
|Earnings Date||Nov 24, 2020|
|Forward Dividend & Yield||N/A (N/A)|
|1y Target Est||32.77|
(Bloomberg) -- Billionaire Patrick Drahi is offering 2.5 billion euros ($3 billion) to take Altice Europe NV private after a roller-coaster ride for the French phone company’s equity investors.Altice’s founder and largest shareholder will pay 4.11 euros a share through his Next Private vehicle, the companies said in a statement Friday, valuing the entire company at 4.9 billion euros. The offer represents a 24% premium over Thursday’s closing price, and the shares jumped as high as 4.22 euros on Friday.The offer “undervalues the company materially -- and so we would recommend that shareholders do not accept the offer,” Russell Waller, an analyst at New Street Research, said in a note. “But we do have some sympathy” with Drahi’s plans given the depressed share price, he added.Altice’s 29 billion-euro debt pile has meant the shares have swung wildly with its changing fortunes. The company said this volatility partly explained the decision to delist. While performance has improved at its biggest unit, France’s SFR, Altice is under heavy pressure to invest in fiber broadband and 5G wireless networks and still reduce leverage.The move may also allow him to focus more on his fast-growing U.S. business. Drahi bought Suddenlink in 2015 and Cablevision in 2016 with a plan to create another U.S. cable giant. Last week, Altice USA offered $7.8 billion to buy Canadian cable company Cogeco Inc.’s U.S. assets and sell the rest to Rogers Communications Inc.Altice Europe hasn’t paid a dividend on its common stock since it was created in 2018 through a spin-off of the U.S. assets. Taking it private allows the company to avoid forking out for stock buybacks it has promised once it reaches a leverage reduction target.Next Private said it will support the group’s deleveraging strategy, and will use “commercially reasonable efforts” to prevent damage to the group’s credit ratings. Altice Europe is rated B at Standard & Poor’s, and is one of the continent’s biggest issuers of high-yield debt. The rating is five levels below investment grade and has a negative outlook, indicating it could fall further.Bonds from Altice Europe borrowing vehicle Altice Finco due in January 2028 dropped 1.2 cents on the euro to 93 cents, the lowest since July, according to CBBT data at 11.10 a.m. in London. Other notes issued by the company also dropped around 1 cent on the euro.The statement said the purchase price will be covered with a term loan provided by BNP Paribas SA, although it didn’t indicate how much of his own money Drahi would contribute.A mass of leverage has never been a problem for the debt king, whose business mantra has long been to buy everything on credit. In the 1990s he used a student loan of 50,000 francs to set up his first cable business in a tiny Provencal town, and through a series of deals amassed the communications empire he runs today.The stock is down about 42% since the start of the year, more than the 17% drop in the Stoxx Telecommunications index. It is unclear whether shareholders will agree to a premium below recent levels -- Altice was trading at over 6.5 euros a share in early February.The delisting highlights the pressure Europe’s phone companies face in rolling out the latest communications technology while facing a squeeze on revenue from regulation and the pandemic. Share price slumps at Orange SA and Telefonica SA have forced both industry giants out of benchmark indexes.The European telecom sector has lost more than 40% of its equity market value in the last five years, and other companies have been pulling back from public markets. The owner of French rival Iliad SA, Xavier Niel, has used buybacks to cement his control. Spanish phone company Masmovil Ibercom SA is being bought by a group of private equity firms.Drahi’s move also represents the second time this month that a major European TMT company has discussed delisting from public markets. Germany’s startup factory Rocket Internet SE said on Sept. 1 it would withdraw its shares from the Frankfurt and Luxembourg stock exchanges.The depressed valuations have boosted European telecom deal activity in the third quarter after a slow start to the year, with more than $17 billion announced before today, according to data compiled by Bloomberg.(Updates with context on dividends, buybacks in fifth paragraph)For more articles like this, please visit us at bloomberg.comSubscribe now to stay ahead with the most trusted business news source.©2020 Bloomberg L.P.
(Bloomberg Opinion) -- Imagine you and I own half each of a $100,000 sports car that has another $50,000 locked in the trunk. The problem is that I have the car keys, so you can neither drive it nor access that money. I offer to buy you out for about $50,000. Fair deal?You’d doubtless feel hard done by. Yet Oliver Samwer, chief executive officer and founder of Germany’s Rocket Internet SE, is making a similar proposition to his fellow shareholders. He wants to take the web-investment company private again, and he’s offering to buy out other investors in a way that would let him and his family keep that nice little stash in the trunk. Samwer and his brothers own 45% of Rocket, but they’d like to own all of it so they want to use the company’s cash to acquire the rest of the shares. First off, they’re doing a 223 million-euro share buyback that will push their ownership above the 50% mark, giving them control of Rocket. Then, they’re planning to use another billion euros or so to buy the rest of the stock.Rocket has 2.6 billion euros ($3.1 billion) of cash, and about half of that will be used to buy out the non-Samwer shareholders. That doesn’t seem too egregious given the current ownership split (if you set aside the disappointing fact that the company is only valued by the market at the sum of its cash holdings). But the company also has 1 billion euros of tech investments — the equivalent of that money in the trunk — which it would get to keep. That gives minority shareholders every right to be seriously peeved. A dollar invested in Rocket when it first sold shares publicly in 2014 would be worth just 45 cents today. The Samwers are now offering investors even less than that to cash out, without any chance of benefiting from the growth of the company’s remaining investments. The 18.57 euro-per-share buyout offer is lower than the current market price.One might expect Rocket Chairman Marcus Englert to do a better job of making sure management is acting in the best interests of all stakeholders. Investors are under no obligation to sell their stock, but the initial buyback means the Samwers are about to get control of the company anyway, even if no one tenders their shares for the full takeover. That could let the brothers — who made their initial fortune by building a clone of eBay Inc. and then selling it to the U.S. company — hold the remaining shareholders to ransom.In fairness, many of these minority investors will have bought the shares knowing they were in a weak position: Samwer already has de facto control through his current 45% holding. But this is still pretty brazen.It again shows the weaknesses in German corporate governance, as with Wirecard AG’s collapse. The country is desperate for tech success stories, but it’s not exactly winning hearts and minds.This column does not necessarily reflect the opinion of the editorial board or Bloomberg LP and its owners.Alex Webb is a Bloomberg Opinion columnist covering Europe's technology, media and communications industries. He previously covered Apple and other technology companies for Bloomberg News in San Francisco.For more articles like this, please visit us at bloomberg.com/opinionSubscribe now to stay ahead with the most trusted business news source.©2020 Bloomberg L.P.
When Rocket Internet IPO’d in 2014 it was the largest tech company floatation in Europe for seven years. A year later it had lost $46 million and its valuation had dropped by 30%. Since then the German startup factory behind internet companies such as Delivery Hero, Zalando and Jumia has languished, in part because the reason for its existence — to provide growth capital for "rocket-fueled" startups — has ebbed away, as the tech market was flooded with capital in recent years. Today the company said it was delisting its shares from the Frankfurt and Luxembourg Stock Exchanges for just that reason.