Changing channels: Patrick Drahi and Dexter Goei © Bloomberg

Altice, the deal-hungry cable and telecoms group controlled by Franco-Israeli billionaire Patrick Drahi, is lining up a potential $185bn bid for Charter Communications, the second-largest US cable company with over 26m subscribers.

Interest in a deal by Mr Drahi’s Altice, which has grown ferociously through debt-laden acquisitions in recent years in France, Portugal and the US, is the latest in a series of consolidation moves among US telecom, cable and media providers.

It pits Mr Drahi against SoftBank’s Masayoshi Son in a battle for the hand of Charter, in which John Malone, the billionaire so-called cable cowboy, owns a 21 per cent stake.

Altice has not formally made an approach and may not proceed, according to multiple people close to the Netherlands-listed group. One complication will be whether the group and its advisers can amass the huge amount of debt financing needed to support a bid for its much larger rival.

These people also cautioned that Charter, which beat out Altice in a battle to acquire Time Warner Cable in a $78.7bn deal that closed just last year, has not expressed interest in a possible combination.

Charter shares rose 2.9 per cent to close at $400.90 in New York, giving it a market value of roughly $121bn. The company has net debt of $62.5bn, meaning a deal including debt could easily surpass an enterprise value of more than $185bn.

Altice only recently listed its US cable subsidiary in New York to position itself for more dealmaking in America, but has managed to win support from shareholders thanks to the speed with which it has delivered operational improvement at Cablevision and Suddenlink. It acquired those regional operators for $17.7bn and $9.1bn in the past two years and then bundled them into Altice USA.

Shares in Altice USA, which has a market value $23bn and a net debt of $22.6bn, were flat following the news of a potential bid, which was first reported by CNBC. However, shares in its parent company Altice NV dropped 5.2 per cent to €19.65 in Amsterdam trading.

Charter has emerged as an attractive target for smaller US telecoms and cable providers because of its footprint, which extends to 41 states and puts its behind only Comcast for subscribers. Earlier this year Charter and Verizon, the largest US wireless telecoms operator, explored a potential combination but the two companies decided not to pursue a deal.

Shares in the company have leapt in recent weeks as it has become the focal point of interest, particularly from Japan’s SoftBank, which is searching for a partner to connect with Sprint, the fourth-largest US mobile phone operator which it controls.

Charter has been cool on interest from Mr Son, the billionaire founder behind SoftBank, saying it had no interest in acquiring Sprint. However, it has not commented on potential takeover interest from either SoftBank or Altice.

Analysts said that Mr Malone is another factor in a potential takeover attempt of Charter. Mr Malone is the largest shareholder in Charter and has significant sway over the industry given his range of holdings that span US and international cable and media.

Greg Maffei, chief executive of Mr Malone’s Liberty Media, through which he holds a stake in Charter, said on Wednesday that Liberty and Charter would “listen to all and any offers that come in and judge them on their merit and appeal”.

However, he said: “The idea that we would take equity that we don’t want is probably unlikely . . . Any deal that would be appealing for us and other Charter shareholders would have to add real value and show real capabilities that are beyond what we think is a very well-positioned company with a very strong management team.”

Dexter Goei, a former Morgan Stanley banker and the chief executive of Altice USA, has not been shy about the French group’s ambition to grow its US footprint through acquisitions.

At the time of the listing of Altice USA in June, Mr Goei said that the IPO was “all about being ready if there is an opportunity to partner up with someone . . . to put ourselves on the map and to have a currency” for future acquisitions.

Charter and Altice have both expanded by rolling up regional operators. Other distributors are looking to gain control of content. AT&T’s $84.5bn bid for Time Warner, the owner of HBO and Warner Bros, is being reviewed by regulators and is expected to close at the end of the year, creating the world’s largest vertically integrated content and distribution company. Verizon has snapped up Yahoo and AOL.

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