Shearman And Sterling

News January 09, 2018

Altice USA on its Separation From Altice N.V.

Shearman & Sterling is advising Altice USA (NYSE: ATUS) on the announced separation of Altice USA from Altice N.V. (Euronext: ATC, ATCB). The separation will enable each business to focus more on their distinct opportunities for value creation and ensure more transparency for investors.

The separation will be effected by a spin-off of Altice N.V.’s majority interest in Altice USA through a distribution in kind to holders of Altice N.V.’s common shares A and common shares B, which requires the filing of a Registration Statement on Form S-1 with the U.S. Securities Exchange Commission. Pursuant to the terms of the distribution, each Altice N.V. shareholder will be entitled to receive 0.4163 Altice USA shares for every Altice N.V. share held by such shareholder as of the record date. Each Altice N.V. shareholder will be given the right to elect the percentage of shares of Class A common stock and shares of Class B common stock such shareholder receives in the distribution. The number of shares of Class B common stock distributed will be subject to a cap of 245 million shares, representing 50% of the shares of Class B common stock owned by Altice N.V. and approximately one-third of the total issued share capital of Altice USA. If the cap is exceeded, the shares of Class B common stock delivered to Altice N.V. shareholders who elect to receive them will be subject to proration, and such shareholders will receive shares of Class A common stock in lieu of the portion of shares of Class B common stock that is cut back.

The separation will be subject to certain conditions precedent, including the payment of a $1.5 billion pro-rata cash dividend payable prior to completion of the spin-off, the entry into or amendment to various arrangements between Altice N.V. and Altice USA, such as a Master Separation Agreement, a license to use the Altice brand and the stockholders’ agreement among Altice USA, Altice N.V. and certain other parties, and the termination of the management agreement pursuant to which Altice USA pays management fees to Altice N.V.

Additionally, in connection with the separation, Altice USA expects to acquire 70% of the equity interests of Altice Technical Services US Corp., a company formed to provide network and commercial construction, maintenance and installation services, and has authorized a share repurchase program pursuant to which Altice USA will repurchase from time to time shares in an aggregate amount up to $2 billion following the separation.

Altice USA is one of the largest broadband communications and video services providers in the United States. The company delivers innovative, customer-centric products and solutions that connect and unlock the limitless potential of its more than 4.9 million residential and business customers across 21 states.

The Team

The Shearman & Sterling team was supported by associates Abiola Fasehun (New York-Mergers & Acquisitions) and Melisa Brower (New York-Compensation, Governance & ERISA).