Shares of Altice USA Inc. gained more than 15% in intraday trade on Tuesday after the telecom’s European parent company said it plans to spin off its controlling stake in the U.S. arm. Shares of the French Altice N.V. were up more than 9%. Altice has been under pressure to deleverage, said Raymond James analyst Stephane Beyazian. “If pressure on the valuation of Altice Europe due to SFR continues, we think the reorganization could eventually open the door to a positive outcome in the French market,” Beyazian wrote in a note to investors. “A separate listing of Altice Europe makes a sale of this asset easier, to Bouygues or Iliad for instance, which could both consider market consolidation synergies in France, in our view. However, we doubt that the intention to sell is unlikely to be reached in the medium-term, as this would require a material discount to the price paid for these assets.” Shares of Altice N.V. have declined 42% in the last three months, while Altice USA is down nearly 12%. By comparison, the S&P 500 index is up 8% in the last three months and the Dow Jones Industrial Average is up 11%.
Market Pulse Stories are Rapid-fire, short news bursts on stocks and markets as they move. Visit MarketWatch.com for more information on this news.
From:: Stock Market News