After saying that it was “exploring the possibility” of an initial public offering in the U.S., the nation’s No. 4 cable operator Altice USA today filed preliminary paperwork with the Securities and Exchange Commission to do so — looking to raise as much as $100 million, according to the filing.
That’s probably just a placeholder number: The company hasn’t determined the exact number of shares it will offer, or the price.
Amsterdam-based Altice became a cable and broadband player in the U.S. following its acquisitions of Cablevision and Suddenlink in the past year and a half. It has about 4.3 million residential customers in 20 states, including a heavy concentration on Long Island and around New York City.
Cash from the offering will be used for “general corporate purposes,” the prospectus says. That could include repayment of some of Altice USA’s $20.5 billion in net debt, as well as systems upgrades or further expansion.
Last year the USA operations that will back the proposed stock offer recorded a net loss of $832.0 million on revenues of $6.02 billion. Altice USA spent nearly $2 billion on programming and other “direct costs” while interest expenses ate up $1.46 billion.
Bloomberg last week reported that Altice continues to eye potential targets, including privately held Cox Communications.
But in November, Altice disclosed that it plans to build fiber optic cable networks capable of delivering broadband speeds as high as 10 Gb per second. That’s up from 300 Mb per second at the Optimum systems it inherited from Cablevision.
Buyers of the proposed Class A shares will have a quiet voice at the U.S. company. Each of these shares will provide owners with one vote; the existing Class B shares primarily controlled by Altice founder Patrick Drahi have 25 votes apiece. As a result, the Class B holders will be able to “control all matters submitted to our stockholders for approval,” the prospectus says.
The Canada Pension Plan Investment Board would also be a major owner of Altice USA.
The Netherlands-based parent company is controlled by Drahi while Dexter Goei oversees the U.S. operations. In January, Drahi said he was launching a 24/7 international news and current affairs channel in the U.S. to complement hubs in Europe, Africa, Asia and the Middle East.
JP Morgan, Morgan Stanley, Citigroup and Goldman, Sachs are joint book-runners for the proposed offering.