Altice reveals its latest cunning plan, bids for full ownership of SFR

The latest round of strategizing by French telco giant Altice went so well, apparently, that it decided to share it with the world via a press event.

Somewhat underplaying this most cunning of plans, Altice framed it as the ‘next step in industrial, commercial and financial strategy’. The catalyst for this bonanza of boardroom brainstorming was the acquisition of US company Cablevision a few months ago and consequent creation of Altice USA.

This new, transatlantic identity requires a rethink, it seems, and Altice wants to centralise core operational functions more, including the acquisition of network management company Parilis and customer services supplier Intelcia, and to then be able to distribute resource to its various arms in a more efficient way.

Here are the key components of the ‘Altice way’ as written by Altice, which leverage the word ‘leverage’ liberally to maximise the transatlantic corporate tone.

Paradoxically a critical part of this new multinational structure is the acquisition of the remaining 22.25% of French operator SFR that it didn’t previously acquire from Vivendi. That is apparently now in the hands of a bunch of smaller shareholder and Altice is offering them eight newly-created Altice shares for every five SFR ones, which amounts to around $2.7 billion and is only a very small premium over the current SFR share price. Regardless the SFR board has unanimously recommended the bid to SFR shareholders.

“We are proud to further advance our group transformation,” said Altice CEO Michel Combes. “Altice has been providing critical strategic and operational support to its subsidiaries enabling them to compete very successfully in their respective markets.

“As we have significantly grown in size and invested into new markets over the last two years, we are focused on ensuring that the entrepreneurial, innovative DNA and operational excellence at the core of the Altice model continue to benefit our businesses in the most optimal manner while taking full advantage of the global scale of the group. Our updated strategy will significantly strengthen our subsidiaries and put them into an even better competitive position to provide our customers with best-in-class services across all of our markets.”

The SFR move seems like a pretty good deal for Altice, especially since SFR’s shares have declined by around a third this year amid tough trading conditions in France. This announcement is essentially an acknowledgement that recent acquisitions (including Portugal Telecom and Suddenlink) and have made Altice into a fundamentally different company and the way it’s run needs to adapt accordingly.