Form 4: Altice USA Director Next Alt S.a.r.l. Executes Capped Calls, Repays Debt with Class A Common Stock

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

Summary

• On December 20, 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 268,410 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 covering a total of 33,819,573 shares of ATUS Class A common stock, expiring in tranches over a 42-day period starting October 25, 2024.
• Patrick Drahi, a director of Altice USA, disclaims beneficial ownership of the reported interests except to the extent of his pecuniary interests.
• 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 potential impact on the company's capital structure warrant a neutral to slightly positive sentiment.

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.

Management Comments

• Each Reporting Person disclaims beneficial ownership of all interests reported on this Form 4 except to the extent of such Reporting Person's pecuniary interests.

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 expiration and exercise of these calls, along with the associated debt repayment, can influence the company's capital structure and potentially impact stock price.

Comparison to Industry Standards

• Capped call transactions are a relatively common strategy employed by large shareholders and companies to manage equity risk and capital structure.
• Similar transactions have been undertaken by companies such as Charter Communications and Liberty Broadband, where capped calls were used in conjunction with share repurchase programs or debt management strategies.
• The specific terms of the capped calls, such as the strike prices (98.5%, 103.5% or 108.5% of the reference price for the lower strike price and 149.6%, 154.6% or 159.6% of the reference price for the higher strike price), are typical for these types of transactions and are designed to provide a balance between cost and potential upside participation.

Stakeholder Impact

• The transactions may have a minor impact on shareholders due to the potential dilution from the capped call exercises.
• The debt repayment could be viewed positively by creditors as it strengthens the company's financial position.

Key Dates