Europe's Altice to spin off U.S. operation, simplify business

Reuters 

By Athavaley

(Reuters) - Telecoms and cable group NV , which is trying to cut debts of around 50 billion euros ($59 billion), said on Monday its board has approved plans to spin-off its U.S. unit from its European operation.

The move is intended to simplify a sprawling that executives said encompassed two distinct markets, the and

Altice's performance in last year led investors to question its strategy, and in November founder returned as while resigned.[nL8N1NFB1B]

"USA's shares have suffered from guilt by association with the weaker results at the European parent," Craig Moffett, an at MoffettNathanson, said in an email.

"The biggest overhang on USA shares," he added, "has been the nagging concern that U.S. shareholders might somehow be called upon to backstop weakness in That risk will now be gone."

Netherlands-based NV, which will be renamed Europe, said it aims to complete the spinoff of its 67.2 percent interest in USA by the end of the second quarter of 2018, following regulatory and shareholder approvals.

has grown in the and through debt-fueled acquisitions, raising its net debt to more than five times its annual core operating profit.

The two companies will be led by separate management teams with Drahi retaining control of both companies.

will become of and will serve as of USA.

Franco-Israeli tycoon Drahi is the group's controlling shareholder with a 31.1 percent stake, according to data.

USA on Monday also approved in principle a cash dividend of $1.5 billion to all shareholders immediately prior to completion of the separation, funded by debt. It also approved a $2 billion repurchase program of U.S. shares, once the separation is complete.

(Reporting by and in Bengaluru; editing by Peter Henderson; Editing by Maju Samuel)

(This story has not been edited by Business Standard staff and is auto-generated from a syndicated feed.)

First Published: Tue, January 09 2018. 05:56 IST