CVC Cablevision Systems Corp. Class A

PARIS--Shares in Patrick Drahi's Altice NV fell Thursday as investors fretted over the rising costs of financing the cable-to-telecom company's big acquisitions.

On Thursday, the company said it would pay an average 7.6% over 7.9 years for the $8.6 billion in debt it has taken on for Mr. Drahi's latest splurge, the $10 billion purchase of Cablevision Systems Corp.

The interest rates on Altice's latest borrowing are above what the group has paid in the past. Higher debt-servicing costs could eat into the cash the Europe-based company generates from Cablevision.

Amsterdam-listed Altice is also issuing €1.8 billion ($1.98 billion) in new equity to finance the Cablevision deal. The company had said when announcing the deal last month that it might raise up to $3.3 billion in fresh equity.

Shares in Altice dropped over 5% as markets opened in Europe Thursday and slipped further later in the day. Around 1505 GMT, the company's stock traded down 8.2% at €7.18. The shares are up around 8% so far this year.

Mr. Drahi's move on Cablevision has coincided with volatility in corporate bond markets driven by concerns over slowing global economic growth and its impact on earnings. Since the deal was announced mid-September, investors have grown cautious on high-yield bonds like Altice's, potentialy pushing up the cost of making acquisitions and threatening to slow the pace of mergers.

Through Altice, Mr. Drahi has been one of the most active cable and telecom deal makers in the past two years, snapping up French mobile operator SFR in October 2014 before expanding in Portugal. Earlier this year, the cable and telecom billionaire made his first move in the U.S. with the purchase of cable firm Suddenlink.

The rising costs of such moves could dampen the entrepreneur's appetite. Altice Chief Executive Dexter Goei told analysts in September that the company was focused on implementing its plans for its current portfolio of companies rather than plotting a speedy return to the M&A market. "We've got a lot on our plate internally right now," a person familiar with Altice said Thursday.

In August, Mr. Drahi redomiciled Altice to the Netherlands, part of an attempt to maintain control over the company as he pursues more potentially dilutive acquisitions. Having so far funded his acquisitions with debt, the move means the billionaire can now raise tens of billions of dollars by issuing new shares without losing control of the company.

Some analysts brushed aside concerns over the financing of the Cablevision deal, saying the stock price swings are partly attributable to volatility around the capital increase.

The fundamentals of the Cablevision deal remain the same and Altice's average cost of debt at 6.2% over 6.6 years is "very attractive," said Emmanuel Carlier at ING Bank.

Write to William Horobin at William.Horobin@wsj.com and Nick Kostov at Nick.Kostov@wsj.com

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(END) Dow Jones Newswires

October 01, 2015 10:15 ET (14:15 GMT)

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