Altice International - comment

STC (Saudi Telecom Company) Group, who have bought a 9.9% equity stake in Telefonica in September 2023, and also acquired United Group’s Tower assets in April 2023) is the latest rumoured bidder for Altice Portugal.  They join the already rumoured list which includes Apex, Apollo, CVC and Warburg Pincus.  Press reports are conflicting on valuation, which ranges from €7-9bn albeit other reports indicate initial bids fall short of Drahi’s expectations of €7bn for the Portuguese assets.  

We struggle to get to €7bn valuation unless assuming some very aggressive step down in CAPEX spend with our expectations more centred on the €5-6bn range.  However, any DCF valuation is heavily influenced by the maintenance CAPEX assumptions in the terminal year.