Altice (SFR) France - comment

Another article in the French press today (Les Echos) reporting on the Altice structure and Drahi’s ambition to sell a partial stake in SFR with a minority shareholder or a preference/convertible structure. There is nothing new in the article except Drahi’s belief the business is worth 8.0x, a far cry from the realistic 5-6x often used. We struggle to see an investor willing to take a minority stake at SFR given its high leverage and current poor performance, preferring a partial or full sale of Altice International assets as the most likely source of new liquidity. 

The article is a rehash of previous comments from Drahi but reiterates our view that this is not an immediate event and we will be still talking about this and asset sales at the Q3 numbers in late October. Surprisingly, the Data centre sale has not materialised by now.