Altice U.S. stock climbed sharply in early Tuesday morning trading, following news that its parent, European-based Altice NV, would spin off its interest in the USA-based cable TV company.
Altice U.S. stock was up 14% to $24.09.
Altice USA, which had its U.S. initial public offering last summer, is the fourth-largest U.S. cable operator behind Comcast, Charter Communications and Cox Communications.
In 2015, it bought two big U.S. cable operators in separate deals: Cablevision Systems Corp. for $17.7 billion and Suddenlink Communications for $9.1 billion.
On Monday, the company announced it would separate Altice USA from Altice NV, based in Amsterdam, resulting in Altice NV spinning off its 67.2% interest in Altice USA. The new named company of the European operations would be named Altice Europe.
In a statement, the company said: “The separation will enable each business to focus more on the distinct opportunities for value creation in their respective markets and ensure greater transparency for investors. Altice NV aims to complete the proposed transaction by the end of the second-quarter 2018 following regulatory and Altice NV shareholder approvals.”
Company founder Patrick Drahi will “retain control” of both companies through the firm Next2. Drahi will then serve as president of the board of Altice Europe and chairman of Altice USA.
In addition, the Altice USA board of directors approved a $1.5 billion cash dividend to all shareholders immediately prior to completion of the separation.