Form 4: Altice USA Director and 10% Owner, Next Alt S.a.r.l., Executes Capped Calls and Repays Debt by Delivering Shares

Next Alt S.a.r.l., a 10% owner and director of Altice USA, executed capped call transactions and repaid debt by delivering shares of Class A common stock.

Summary

• On October 25, 2024, Next Alt S.a.r.l., an indirect wholly-owned and controlled personal holding company of Patrick Drahi, engaged in transactions involving Altice USA, Inc. (ATUS) Class A common stock.
• Next Alt repaid debt to a financial institution by delivering 268,409 shares of Class A common stock at prices of $23.3164, $24.5, and $25.6836 per share.
• These shares were delivered in connection with the exercise and expiration of existing bilateral European capped call transactions.
• Next Alt is party to capped call transactions with a financial institution counterparty with respect to a total of 33,819,573 shares of Class A common stock of the Issuer.
• Uppernext S.C.S.p transferred 6,343,893 shares of Class A common stock of the Issuer to Next Alt.
• The capped calls expire in equal tranches over a 42 scheduled trading day period, beginning October 25, 2024 and are automatically exercised upon expiration.
• Patrick Drahi, a director of Altice USA, may be deemed to beneficially own shares held by Next Alt and Uppernext.
• Armelle Koelf acted as attorney-in-fact for both Next Alt S.a.r.l. and Patrick Drahi, executing the Form 4 filings.

Sentiment

Score: 6

Explanation: The document describes routine transactions related to existing financial instruments. It doesn't contain overtly positive or negative information, but the complexity of the transactions and the involvement of a major shareholder suggest a neutral to slightly positive outlook.

Future Outlook

The capped calls expire in equal tranches over a 42 scheduled trading day period, beginning October 25, 2024 and are automatically exercised upon expiration.

Industry Context

Capped call transactions are often used by companies or major shareholders to hedge against potential stock dilution or to monetize a portion of their holdings without directly selling shares on the open market. The use of such instruments by Altice's major shareholders reflects a sophisticated approach to managing their investment and potential risk.

Comparison to Industry Standards

• Capped call transactions are a relatively common strategy employed by large shareholders in publicly traded companies, including those in the telecommunications and media sectors.
• Similar transactions have been undertaken by major shareholders in companies like Charter Communications and Comcast to manage their equity positions.
• The specific terms of the capped calls, such as the strike prices (98.5%, 103.5% or 108.5% of the reference price) and the higher strike price (149.6%, 154.6% or 159.6% of the reference price), are typical for these types of transactions and are designed to provide a balance between hedging risk and potential upside participation.

Stakeholder Impact

• The transactions may have a minor impact on shareholders due to the sale of shares, but the capped call structure is designed to limit potential dilution.
• The debt repayment benefits creditors of Next Alt S.a.r.l.

Key Dates