CPPIB, partner to sell most of U.S. cable stake to Altice

70 per cent of Suddenlink

TORONTO • The Canada Pension Plan Investment Board will receive about US$1.16 billion in cash and promissory notes as its share of a deal that will see European telecom company Altice SA buy a controlling stake in U.S. cable operator Suddenlink.

Altice, headquartered in Luxembourg and active in several European countries, has agreed to purchase a 70 per cent stake in the company that owns Suddenlink from CPPIB and private equity firm BC Partners.

The sellers will each keep a 12 per cent stake in Suddenlink’s parent, Cequel Communications Holdings, and receive US$960 million cash and a US$200 million note for their portion of the deal, which requires U.S. regulatory approval.

The transaction — expected to close by the end of the year — pegs Suddenlink’s value at about US$9.1 billion.

CPPIB and its co-investors acquired Suddenlink in 2012 in a deal valued at US$6.5 billion.

“This transaction is an excellent opportunity to realize a portion of the embedded value of CPPIB’s original investment in Suddenlink,” said Mark Jenkins, a senior managing director and global head of private investments at CPPIB.

“We are now looking forward to developing a long-term partnership with Altice, one of the largest global telecom companies.”

Based in St. Louis, Mo., Suddenlink offers television, high-speed In- ternet and telephone services to 1.5 million residential and commercial customers in several U.S. states.

The deal marks Altice’s first U.S. acquisition.

It has grown through a series of acquisitions over the past dozen years, expanding from a small regional Internet and cable provider in France’s Alsace region to making a $18.5-billion acquisition last year of France’s no. 2 mobile phone operator, SFR. Earlier this year, Altice also bought Portugal Telecom for $8.4 billion.

Altice has also made a takeover approach for larger Time Warner Cable Inc., whose takeover by Comcast Corp. was called off last month, a person with knowledge of the matter said.

Altice founder Patrick Drahi wants to expand his telecommunications empire to a U.S. cable market that is being quickly reshaped by a series of mergers. Cable providers are trying to get bigger as their traditional business comes under pressure from online rivals.