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Altice USA Plans Separation From European Parent

European telecom company Altice N.V., said late Monday it plans to separate its U.S. cable operation – Altice USA – from the parent company in a transaction that it says will allow each business to focus on value creation in their respective markets and ensure greater transparency for investors.

As part of the separation Altice N.V., the European parent, will become Altice Europe. The transaction is expected to close by the end of the second quarter.

Each unit will have its own management team – Altice N.V. founder Patrick Drahi will remain in control of both companies and will serve as president of the Board of Altice Europe and Chairman of the Board of Altice USA. Current Altice USA CEO Dexter Goei will remain in that role, and his current management team will remain intact.

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As part of the deal, Altice will spin off its 67.2% interest in Altice USA to shareholders. The Altice USA board has also approved the payment of a $1.5 billion cash dividend to all shareholders immediately prior to completion of the separation. Formal approval of the dividend and setting of a record date are expected to occur in the second quarter of 2018.

Altice USA went public in May and although it had a strong debut – it opened at $30 per share – recently it has declined, mainly due to leverage concerns at the parent company. Altice USA stock fell 35% in 2017, closing at $21.23 per share on Dec. 29. The stock finished down about 1% (15 cents) to $21.09 per share. The stock was up about 2% (41 cents) to $21.50 in aftermarket trading.

In a conference call with reporters, Goei said the separation won’t necessarily mean that Altice USA will be more aggressive on the deal front, adding that the company will continue to focus on organic growth.

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