Shares of Altice (ATUS 8.23%) have soared as much as 10% today after the company announced a tender offer to repurchase shares. The company is looking to buy back $2.5 billion worth of stock.
The tender offer will be conducted as a modified "Dutch auction," and Altice is offering between $32.25 to $36 per Class A share. The telecommunications company will end up buying back 19.6% to 21.9% of total Class A shares outstanding if it is fully subscribed by investors. When including super-voting Class B shares held by Founder Patrick Drahi, Altice would repurchase 12.8% to 14.3% of all outstanding shares if the deal is fully subscribed.
As a result of the tender offering, Altice is boosting its share repurchase target for 2020 to approximately $5 billion compared to the current year-to-date total buybacks of $2.5 billion.
The tender offer is contingent upon Altice closing the previously announced divestiture of 49.99% of its Lightpath fiber-enterprise business, which is expected to bring in gross cash proceeds of $2.3 billion. That transaction is expected to close in the fourth quarter. Drahi in September kicked off a plan to buy out all other Altice shareholders to take the company private.
The tender offer expires on Dec. 21, 2020. Once investors tender their shares within the specified range, Altice will select a finalized price that it is willing to pay after factoring in all of the tendered shares and the prices offered by shareholders.