Altice Wasn't Ready for TWC Merger -- 3rd Update

By Ruth Bender 

PARIS--Deal-hungry executive Patrick Drahi said Wednesday that the time wasn't ripe for his Altice SA telecommunications firm to pursue Time Warner Cable Inc., but he still plans to grow his business across the Atlantic.

"We weren't ready," Mr. Drahi told a French parliamentary hearing. "Yes, we do things fast...but we do them modestly."

Mr. Drahi's comments come a day after Charter Communications Inc. said it would buy TWC in a deal valued at roughly $55 billion or $195 a share, a company Altice had also been eyeing.

Mr. Drahi--who has been one of the most acquisitive telecom entrepreneurs in Europe in recent years--said it wasn't because of price that he decided not to bid for Time Warner Cable. He felt it would have been too hasty to do a deal that size days after agreeing to buySuddenlink Communications, which gives Altice a foot in the door of the U.S. market.

Altice's executive chairman was speaking to the National Assembly's committee of finance and social affairs, which regularly invites French business leaders to give their views.

In the days before Charter struck a deal with Time Warner, Mr. Drahi was in hot pursuit of the company, threatening to once again derail the plans of Charter and John Malone, whose Liberty Broadband Corp. is backing Charter's acquisition. In 2013, Charter made multiple offers to buy Time Warner Cable but was rebuffed.

Mr. Drahi met TWC's chief executive, Robert Marcus, on May 20 to discuss a potential cash-and-stock deal, The Wall Street Journal reported. But days later, Charter signed a deal.

"I didn't lose, I didn't bid," said the controlling shareholder of Altice, a company based in Luxembourg with telecom operations from France to Israel. "When I met with Time Warner Cable, they wanted us to decide within the hour. I said, let's calm down."

Mr. Drahi said he felt that Altice wasn't ready to integrate a company the size of TWC, which has many employees. A deal of that size could also have impeded plans to do deals in other markets across the globe, he added.

"I wasn't moving from 30 billion [euros] of debt to 70 billion that worried me massively, it was jumping from 35,000 employees to 120,000," Mr. Drahi said. "I didn't have at the time of making a decision the necessary management structure to take on such a responsibility."

In the end, Mr. Drahi said he was pleased Mr. Malone--who has been a role model to him throughout his career--won.

But the 51-year-old trained engineer hasn't said his last word on the U.S.

Mr. Drahi said there will be many more opportunities to buy smaller and medium-size assets in the country that allow his company to grow to a similar size to TWC, even if it takes longer. The purchase of smaller cable company Suddenlink is the first step on that path.

"It's even more interesting now," Mr. Drahi said, noting that buying up smaller companies would be cheaper and that he will likely have less competition in future deals as the market leaders won't be able to buy more.

"We have time. We'll first see what we're capable of doing there," Mr. Drahi said.

Meanwhile, Altice will continue to look for potential acquisitions in Europe.

The executive joined many of his European rivals in urging the bloc's telecom operators to merge to prevent some of them going under and losing out to competition from abroad.

"Consolidation isn't about creating a monopoly...it's to allow European operators to not fall behind others," Mr. Drahi said.

Write to Ruth Bender at [e-mail]

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