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Altice plays down M&A speculation in France amid rumored interest from Bouygues

Altice NV played down speculation of further M&A consolidation amid rumored interest for its struggling French division from Bouygues Telecom SA-owner Bouygues SA and co-investors.

The French conglomerate was reportedly in early stage discussions with potential co-investors, including private equity firm CVC Capital Partners, to firm up a bid for Altice France, whose core business is telecommunications group SFR Group SA.

Speaking during a May 17 earnings call, Altice CFO Dennis Okhuijsen said the European telecoms and cable group would remain focused on delivering shareholder returns and returning the business to growth.

"I don't think there is anything in the cards today that suggests, other than market rumors and market press reports … that there is anything [planned] around consolidation," Okhuijsen said, adding that "today, it's all about operational turnaround."

First-quarter revenue in France was down 1.1%, totaling €2.6 billion, amid fiber and mobile customer additions, while consolidated European revenue fell 1.2% to €3.53 billion. This translated to a 0.5% year-over-year decline in adjusted EBITDA across the group to €1.3 billion.

CapEx for Altice Europe grew to €761 million, compared with €687 million the prior year.

Commenting on the results in a May 17 statement, Patrick Drahi, founder of Altice NV, said he was "confident" the group would build on the initial improvements in the coming quarters and eventually return to growth.

The company, which announced a spinoff of Altice USA Inc. in January, said it expects the transaction to be effective early June.

Altice is also in the process of selling a minority stake in its French towers portfolio, its entire Portuguese towers business, as part of a noncore asset disposal program, which it expects will generate proceeds of at least €2 billion. Separately, the group is in discussions to sell its Dominican Republic division.

Okhuijsen told analysts that the company is aiming to conclude all disposals in the second half of 2018.