Altice NV intends to spin off its controlling stake in its U.S. arm as part of a broader reorganization that will split the company in two: Altice Europe, which would include its international holdings, and Altice USA Inc.

“At the core of our strategy is the operational and financial turnaround in France and Portugal,” the European cable operator said in a statement Monday. Its shares jumped as much as 10% in early trading Tuesday, before easing to trade up almost 7%

The debt-laden company has been under pressure to improve performance, following disappointing third-quarter results, when Altice disclosed unexpected weakness in its French and Portuguese businesses that wiped €6 billion ($6.99 billion) off the market value of the Amsterdam-listed company.

Patrick Drahi, the French billionaire who founded Altice and took the reins of the company in November as part of an executive shakeup to assuage investors, would retain control of both companies and serve as president of the board of Altice Europe and chairman of the board of Altice USA. Both companies would be run by separate management teams with Dennis Okhuijsen serving as chief executive officer of Altice Europe and Dexter Goei continuing to serve as CEO of Altice USA. Both will report to Mr. Drahi.

Shareholders of Altice USA, one of the largest cable operators in the U.S. following the takeovers of Cablevision and Suddenlink, would receive a $1.5 billion cash dividend before the separation is completed, Altice said. The spinoff, subject to shareholder approvals, is expected to be completed by the end of the second quarter.

In addition, Altice USA has approved a $2 billion share buyback program to take effect following the separation.

Shares of Altice USA rose 1.9% in after-hours trading to $21.50, still below the $30-a-share price of its initial public offering in June.

Source:AFP