By Marcel Michelson, Forbes
Altice , the acquisitive French telecommunications group controlled by Patrick Drahi, agreed to buy a 70 per cent stake in Suddenlink of the United States — valuing the privately held firm at $9.1 billion — and is reportedly also in talks about a deal with Time Warner Cable TWC +5.41% Inc.
The move would allow the discreet billionaire, who lives in Switzerland and Israel, to expand his empire beyond Europe, Israel and the Caribbean to the United States and hoist him closer to his role model John Malone.
Drahi competitor Xavier Niel so far failed to make inroads in the United States as his Iliad offer to buy Deutsche Telekom USA was rebuffed by the German parent.
Drahi, who started out in local French cable television and a plan to create an online exchange for Cavaillon melons, is an astute dealmaker and ruthless cost cutter.
But investors may start wondering whether there is sufficient cash generation in the group to justify the leverage. In the case of Suddenlink, Altice provides $1.2 billion in cash, the rest of the financing comes from Suddenlink debt, vendor financing and debt roll-over by the current owners.