Drahi’s Altice group is having a tough time, caught up in a financial scandal and juggling $60 billion in debt
According to La Tribune [in French] Patrick Drahi, the French-Israel billionaire who controls the Altice operator group has approached French rivals Bouygues and Free about a possible deal with his SFR via a banker.
French rivals
Free is the operating brand in France (and Italy) for the Iliad Group, founded and controlled by another French billionaire, Xavier Niel. Bouygues ownership is based on two long-standing core shareholders: SCDM, a simplified joint stock company controlled by Martin Bouygues, Olivier Bouygues and their families; and its employees, through a number of dedicated mutual funds.
Citing unnamed sources, the newspaper reported that neither was interested in the move which would consolidate the French mobile market.
Swamped in scandal
Drahi’s group is having a difficult time since a major financial scandal broke in Portugal in July. The group’s co-founder, Armando Pereira, Co-founder, is accused of corruption, tax fraud and money laundering.
He and businessman Hernâni Vaz Antunes are suspected of being involved in a scheme to rig the French group’s local procurement processes.
The ongoing investigation has resulted in the suspension of executives and suppliers in France, Portugal and the US.
Debt-laden
Altice Group’s growth has largely been funded by debt, which currently stands at around $60 billion, and Drahi delisted in. Now Drahi is trying to sell off large part of the conglomerate to finance that debt.
He has said he would prefer to dispose of Altice’s stakes in European operators to private equity firms rather than industrial or strategic partners.
In the not too distant future, he could look to offload his 24.5% shareholding in BT Group as the change of CEO looms, with Philip Jansen being replaced by the Allison Kirkby, who is leaving her post at Telia on a high note. BT’s share price has dropped 52% over the last five years.
Last week, in his first address to staff since the financial scandal broke, Drahi acknowledged that the company’s management had made ‘stupid’ mistakes, including the centralisation of procurement.
He did put in a rare appearance at an investor call in August though. On that call he said,
“This has come as a shock and as a huge disappointment to me…If the allegations are true, I feel betrayed and deceived by a small group of individuals, including one of our oldest colleagues.”