Altice Europe raises €2.5bn by hiving off shares in tower companies
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 €31 billion.
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 SFR.
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 operations.
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 business.”
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.