21 June 2018
| Alan Burkitt-Gray
Challenged fixed and mobile carrier Altice Europe is raising €2.5 billion in two separate deals to sell part of its mobile tower interests.
This is separate from a plan to sell its wholesale voice
business to Alexandre Pébereau’s
Tofane Global and another plan to sell Altice Studio’s contents
rights to Orange. Altice Europe has a debt of about
In the bigger of the two tower deals, private equity group KKR
will take over 49.99% of the equity in a new unit, working
title SFR TowerCo, which owns 10,198 cell sites owned and
operated by Altice Europe’s French mobile business
Altice Europe says that the KKR deal gives SFR TowerCo an
enterprise value of €3.6 billion. It will be the biggest
tower company in France, said Altice Europe.
The smaller deal will move Altice Europe’s PT
Portugal – formerly Telecom Portugal – into a
new company, Towers of Portugal (ToP). A consortium including
Morgan Stanley and Horizon Equity Partners will buy 75% of the
tower company and its 2,961 sites in a deal giving ToP an
enterprise value of €660 million.
Altice founder Patrick Drahi said: "I am enthusiastic about
creating new tower partnerships in France and Portugal. With
KKR, Morgan Stanley Infrastructure Partners and Horizon Equity
Partners, we have found long-term partners of the
highest-quality who share our vision to invest in leading
infrastructure and growth opportunities."
It is just the latest move after Drahi over-extended Altice by
taking over a large number of businesses – including
US cable companies, now hived off into the separate entity,
Altice USA, and Telecom Portugal as well as other
Drahi said: "Both tower businesses will be uniquely positioned
to grow as they provide increasingly important infrastructure
services to operators in both markets. Simultaneously, these
transactions underline our commitment to deliver and
proactively manage our balance sheet while highlighting the
significant underlying value of Altice Europe’s
SFR, a subsidiary of Altice Europe, will have a 20-year master
agreement with SFR TowerCo that "would set a clear partnership
framework between the two companies".
The Portuguese deal, which also has a 20-year master agreement,
is "structured on the grounds of a long-term partnership
between PT Portugal and Towers of Portugal, while PT Portugal
will reinvest to hold a 25% financial stake alongside the
consortium", said Altice Europe.