BC Partners eyes U.S. cable market mergers with Suddenlink deal - co-chairman

Wed May 20, 2015 8:54am EDT
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By Freya Berry

LONDON May 20 (Reuters) - BC Partners is hoping to participate in the consolidation of the U.S. cable telecoms market by maintaining a stake in Suddenlink after its sale to Altice SA, the private equity fund's co-chairman said.

BC said on Wednesday that it and the Canada Pension Plan Investment Board (CPPIB) would sell a 70 percent stake in cable operator Suddenlink to the European telecoms group, valuing Suddenlink at around $9.1 billion.

Both sellers will retain a 12 percent stake in the business, which gives Altice its first foothold in the United States.

Reuters previously reported that Altice had also held talks to buy Time Warner Cable, which has a market value of $44.5 billion, as it seeks to expand abroad.

Raymond Svider, co-chairman and a managing partner at BC Partners, declined to comment on Wednesday on whether Altice might seek to also buy Time Warner Cable but said by retaining a stake in Suudenlink his firm was still very much interested in whatever happens next.

"It will allow us to further participate in the U.S. market, which would have been hard on our own," Svider told Reuters in a telephone call.

Svider said he did not see the Suddenlink acquisition as a barrier to Altice making a play for Time Warner Cable, although ultimately it would be for the regulators to decide on the viability of such a deal.

Sector bankers have in recent months raised doubts over the ability of private equity funds to play a significant part in the current wave of consolidation sweeping through the telecoms industry as mobile and fixed line services converge, with the big industry players able to stump up cash beyond the capabilities of even the largest funds.

The Suddenlink sale to Altice means that BC Partners only held the business for two and a half years, shorter than the usual period of four to six years for private equity to hold a specific investment.

However, the deal gives the buyout firm an implied return of 2.3 times its money invested as part of its ninth European fund, a source familiar with the matter said. (Editing by Greg Mahlich)