At Goldman Sachs’s gleaming Plumtree Court offices in London on September 6, Patrick Drahi pledged something that would once have been unthinkable: His willingness to put every part of Altice, the telecommunications and media giant he cobbled together over 30 years, up for sale.
The divestments will mark a reversal for this serial buyer of assets, who is having to unravel an empire that gave him a net worth of about $22 billion at its peak, according to the Bloomberg Billionaires Index. The reputation of the self-made tycoon—who counts the auction house Sotheby’s among his personal assets—has been hammered.
In the past when the group’s results were disappointing, yield-hungry investors allowed Altice to push its debt maturities forward without questioning its long-term viability, said Florian Chapel, a portfolio manager at Ironshield Capital Management. But now, he said, higher rates, the corruption case and disappointing earnings with limited cash flows make an outright refinancing of short-term and mid-term debt difficult, forcing divestments or equity sales.
“I don’t see Drahi in a position to value his group with large multiples,” said Bryan, Garnier’s Coudry. Internal estimates at Altice see the data centers fetching as much as €1 billion. Drahi has expressed reluctance to sell his media business, which includes the popular French news channel BFM TV, because it’s doing well and is core to his strategy. It would take a high price—in the range of €1.5 billion to €2 billion—to convince him to sell it, people familiar with the matter said, asking not to be identified because the information isn’t public.
Pereira, 71, a co-founder of Altice and Drahi’s right-hand man, was responsible for the technical side of operations, including procurement. Detained along with two other Portuguese men who allegedly set up businesses that won supply contracts from Altice, Pereira remains under house arrest. He and his lawyers declined to comment on the investigation.
Altice says it’s a victim of the alleged wrongdoing, although it has yet to bring legal action against any of the people allegedly involved. In his meeting with unions this month, Drahi said it was “stupid” to have centralized procurements. “Purchasing policy is now carried out country by country, under the authority of the CEOs,” he said.