The company is drawing up plans to test the waters. Nothing is sure yet. Its at a preliminary stage. However, it makes sense if it were to come out with an IPO since it would give it a strategic hold through which it can further expand its reach in the U.S. cable market.
According to sources familiar with the matter at hand, Altice USA is drawing up plans for an initial public offering.
Altice USA was created when Netherlands-based cable operator Altice NV acquired Suddenlink Communications and Cablevision.
As per sources, the IPO is likely to allow Patrick Drahi, a French billionaire and Altice’s founder, to expand his budding U.S. cable empire by giving Altice USA public stock. This can later be used as a currency to help finance more acquisitions.
Altice USA is currently valued in the range of $25 billion – $30 billion. Drahi plans on bringing in fresh investments by making presentations to bankers in the coming weeks as to how they could participate in his profit making venture.
Based on these pitches, Altice USA may hire IPO underwriters sometime in January and could go public later in 2017. Naturally, the launch of the IPO will be subject to market conditions, clarified the sources.
As per one of the sources, the upcoming IPO could raise as much as $2 billion.
However they all cautioned saying, IPO plans are only preliminary and Drahi may decide to keep Altice USA private.
All of the sources preferred the cover of anonymity since the deliberations are confidential.
However, if the IPO does happen, it would allow Altice USA to keep expanding its footprint in the U.S. by acquiring mid-sized players which will pass antitrust scrutiny, said the sources.
Furthermore, taking the company public would also allow its investors, including, Canada Pension Plan Investment Board and private equity firm BC Partners Ltd to cash out, if at all, in the future.
According to one of the sources, Drahi, who already has a controlling share, has no intention of giving up control of Altice USA.
Altice already operates in countries such as France, United States, Israel, the French Caribbean, Belgium, Portugal, Luxembourg, Switzerland and the Dominican Republic.