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Rodolphe Saadé’s Strategic Move with Altice Media Acquisition

Rodolphe Saadé, a prominent figure in the shipping industry, has reached an agreement to acquire the entirety of Altice Media shares, amounting to an enterprise value of 1.55 billion euros in cash, from fellow billionaire Patrick Drahi.

Altice France announces a sale of Altice Media to CMA CGM.

Altice Media serves as the French media arm of the telecommunications group Altice and holds ownership of prominent rolling news channels and radio stations like BFM TV and RMC radio.

The deal is expected to close around this summer.

For Rodolphe Saadé, CEO of CMA CGM, this deal signifies a consolidation of influence in the French media landscape.

BFM, with its substantial daily viewership of over 12 million, adds to Saadé’s existing media portfolio, which includes regional newspapers like La Tribune and La Provence, as well as a 10% stake in the television channel M6.

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The relatively high 13.9 EV/EBITDA multiple likely incorporates a premium reflecting the increased power and influence Saadé gains from this transaction.

While CMA CGM has been profitable during the pandemic, accumulating €45 billion in profit from 2020 to 2023 and diversifying into port terminals and logistics through acquisitions, Saadé’s recent ventures into media serve a whole different purpose: gaining influence.

Critics caution that such media ownership, when concentrated among a few billionaires like LVMH CEO Bernard Arnault, telecoms magnate Xavier Niel, and logistics tycoon Vincent Bolloré, could undermine media impartiality and pose risks to French democracy.

Rodolphe Saadé affirmed that he had urged the current leadership of Altice Media to continue and promised not to meddle with its editorial decisions.

On the other hand, Altice’s bondholders anticipated that the funds generated from the sale of BFM and RMC would be allocated towards debt repayment.

However, during a discussion with its creditors, Altice management revealed more ambitious targets for debt reduction than before, warning lenders that they will need to write off a portion of their claims, amounting to a loss of 30%.

An investor who had lent 100 to Altice France would thus end up with only 70.

Altice says it is ready to contribute to the debt reduction plan, using the 2 billion euros recovered from the previous sale of data centers to Morgan Stanley and BFM-TV.

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But on the condition that lenders agree to make the required effort. Bondholders expected a more amenable approach.

Overall, should Patrick Drahi, the owner and founder of Altice, succeed in reaching an agreement with its creditors, this sale stands to significantly alleviate the group’s daunting 60 billion dollars debt load, presenting a positive outlook for Altice’s future.

Concurrently, Saadé’s acquisition of BFM and RMC promises to inject a fresh sense of vitality into the media landscape.

Notably, Saadé has articulated a vision for the media to embrace a more nuanced portrayal of global events, countering the tide of extremism, as conveyed by insiders within CMA CGM.

These developments unfold against a backdrop of escalating competition from far-right news outlet CNews, posing a challenge to BFM.

To get in contact with feedback on this article please email us at publishing@krugmaninsights.com

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