Form 4: Altice USA Share Transactions and Capped Call Expirations Trigger Debt Repayment

Next Alt S.a r.l., an entity controlled by Altice USA director Patrick Drahi, delivered shares to a financial institution to repay debt related to expiring capped call transactions.

Summary

• Next Alt S.a r.l., a personal holding company controlled by Patrick Drahi, executed transactions involving Altice USA Class A common stock.
• These transactions were related to the expiration of existing capped call agreements with a financial institution.
• The capped calls, covering a total of 33,819,573 shares, expired in tranches over a 42-day period starting October 25, 2024.
• Upon expiration, Next Alt delivered shares to the counterparty to repay debt incurred when the capped calls were established.
• The share deliveries occurred on December 10, 2024, with 268,410 shares delivered at each of three different prices: $23.3164, $24.5, and $25.6836.
• The total value of shares delivered was $8,589,120, $8,320,710 and $8,052,300 respectively.
• The capped call agreements had varying strike prices, and the number of shares delivered depended on the settlement price of the stock.

Sentiment

Score: 6

Explanation: The document describes a routine transaction related to capped calls, which is neither particularly positive nor negative. The sentiment is neutral to slightly positive as it represents the unwinding of a financial instrument.

Risks

• The complex nature of capped call transactions and their impact on share delivery could introduce volatility.
• The dependence on the settlement price for share delivery could lead to unpredictable outcomes.

Management Comments

• Next Alt S.a r.l. is an indirect wholly-owned and controlled personal holding company of Patrick Drahi.
• Mr. Drahi is a director of the Issuer.
• Next Alt is a party to a stockholders agreement with the Issuer pursuant to which Next Alt has certain rights to appoint directors of the Issuer.
• 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 a common strategy used by companies and major shareholders to manage risk and potential dilution. This filing reflects the unwinding of such a transaction.

Comparison to Industry Standards

• Capped call transactions are frequently used by large shareholders to hedge their positions, similar to other large shareholders in the telecommunications and media industry.
• The specific terms of the capped calls, such as the strike prices and expiration schedule, are typical for these types of agreements.
• The share delivery mechanism is standard practice for settling capped call obligations.

Related Party Transactions

• Next Alt S.a r.l., controlled by Patrick Drahi, a director of Altice USA, engaged in share delivery transactions with a financial institution.

Stakeholder Impact

• The share delivery could have a minor impact on the stock price due to the increased supply of shares.
• The transaction is unlikely to have a significant impact on other stakeholders.

Key Dates

Keywords

Altice USA, Patrick Drahi, Next Alt S.a r.l., Capped Calls, Share Delivery, Debt Repayment, Stock Transactions