Ahead of the €1.3 billion IPO of Hot Telecommunication Systems Ltd. (TASE: HOT.B1) parent company Altice SA on the Euronext Amsterdam Bourse, "Globes" offers a profile of its controlling shareholder Patrick Drahi (50), a French Jew. Drahi is discrete and avoids the media limelight, even when floating Altrice subsidiaries, such as French cable carrier Numericable SA (Euronext Paris: NUM).
"Drahi did not attend Numericable press conferences or meetings with analysts," says Gamal Hany, a correspondent for France's BFMTV. "The company's 380-page prospectus mentions Drahi twice: once as a founder of Numericable and once as a shareholder."
"He is very discrete," continues Hany. "He gives few interviews, information about him on websites of his companies is paltry… Nonetheless, he is without question the strongman in Numericable, and during its merger talks with SFR, a subsidiary of Vivendi SA (Euronext: VIV), he personally handled the meetings with the other party's controlling shareholders."
Drahi's discreteness draws attention in the European capital markets. In January, "Euroweek" said that the success of Altice's IPO largely depends on him. "Investors are queuing up to meet Altice's founder Patrick Drahi and his management team… and meetings held with him have been successful. Many investors already know him from the Numericable IPO," it says.
One of the probably reasons for Drahi's discreteness is the fortune he has amassed by turning Altice into a European telecommunications conglomerate. Although the exact figure is uncertain, it is undoubtedly around $1 billion, making him one of France's wealthiest men, although "Forbes" does not list him in its latest ranking of France's billionaires.
Drahi, the son of Moroccan immigrants, embarked on his path to success in lycée. "People who worked with him say that he was hungry for success," says Hany. "This hunger apparently emerged in his youth. As the son of immigrants from Casablanca he was on classroom benches at France's most prestigious engineering university, l'École Polytechnique alongside students from 'the good families'."
In 1993, Drahi, fed up with being an employee, struck out on his own, a choice that would turn him into a pioneer of the cable television industry in Europe in general and France in particular. He first founded CMA, followed by Sud Cable Services a year later to serve residents of Provence, with support from an American friend, Rifkin. Sud Cable was acquired by US cable carrier Intercomm shortly afterwards. Drahi did the same thing in 1995, founding Médiaréseaux with the help of pan-European cable carrier UPC. The company is thriving, operating as UPC's French arm.
Drahi was not burned by the dot.com bubble. Just before UPC went bankrupt, he sold Médiaréseaux to it and continued on his way. The amount of the sale is unknown.
Drahi founded Altice in 2002, after the capital markets recovered, and began to take over the telecommunications market in France and parts of Europe, including through a series of acquisitions. "He was the only one to believe in the cable industry when everyone was already tired of it," a senior industry source told BFMTV. He consolidated the cable companies under Numericable, which effectively became France's only cable television carrier. It expansion was largely financed by US private equity firm Carlyle Group LP (Nasdaq: CG) and European private equity firm Cinven, which still own 21% and 13% of Numericable, respectively, compared with Altice's 40% stake.
As BFMTV notes, the consolidation "was long and hard, service quality was harmed and there was a consumer protest against the company." After the consolidation was completed, Altice began acquiring cable companies, Internet provides, and telephony companies in Belgium, Luxembourg, Portugal, Switzerland, Israel, and, most recently in the Dominican Republic and French West Indies. The probable reason for the IPO at a company value of $8 billion is the huge demand for its shares.
BFMTV says that Drahi closely monitors Altice's operations, saying. "He comes two or three times a month, sits in the conference room and meets with the managers of all the operations. After each meeting, he takes the necessary administrative decisions on the spot." It adds, "He is a sympathetic and brilliant man who is often presented as a 'financial genius'." It quotes an aide as saying, "When he reads a financial report, he immediately knows where the company's problems are." Another aide said, "When he went out on his own, he had nothing. He's built an empire, and few people can be proud of such an achievement."
So far as is known, Drahi is not active in the Jewish community in France or Europe, suggesting that he is focused on his businesses, and that he has little affiliation for his religion. He resides with his wife and four children in Geneva.
Published by Globes [online], Israel business news - www.globes-online.com - on January 29, 2014
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