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Altice weighs EUR 3bn sale of Teads with Morgan Stanley – sources

Altice Europe is weighing a sale of Teads in a process that could value the digital advertising business in the region of EUR 3bn, according to sources familiar with the matter.  

The Patrick Drahi-controlled telecom and media group has engaged Morgan Stanley to explore a full sale of the programmatic digital advertising firm, the sources said.  

Deliberations remain at an early stage with sale materials yet to be distributed, one source said.  

Other options, including the entry of a financial partner with Altice retaining a stake, are still on the table, a further source said.   

Earlier this month, it was reported that Teads has been in merger discussions with Israeli peer Tremor International [LON:TRMR] for several months. A deal with Tremor remains among the options being explored, this source said. 

Altice is expected to invite a selected number of strategic and private equity funds to participate in any sale process, one source said. Private equity funds and fund-backed strategics are expected to show interest in the business, this source added.  

Teads, which is expected to be marketed off forward looking EBITDA in the region of EUR 275m, could be valued at EUR 2.5bn to EUR 3bn in the event of a sale, according to the sources. The company posted FY21 revenues of USD 678m, representing growth of 25% year-on-year, as reported. Financial results were not disclosed for FY22.  

Teads had previously explored an IPO in 2021, with Morgan Stanley, Goldman Sachs and JP Morgan as lead bookrunners, before eventually abandoning listing plans. The listing would have valued Teads at USD 5bn, it was reported at the time.  

Morgan Stanley has now been mandated specifically for a potential sale process, the sources said.   

In wake of the ongoing fraud investigation by Portugal’s office for public prosecutions that was initiated this July, and given its EUR 60bn debt, rumours are heightening that Altice will look to sell most of its media and telecom assets, two of the sources said.    

Following news of the Portuguese probe, it was reported that Altice had appointed Lazard and BNP Paribas to oversee its assets disposal strategy.   

The fraud investigation has exposed Altice to heightened media and political attention, which is why it is likely to carry out a narrower, more selective process for Teads, one of the sources said.

Founded in 2011, Teads offers services which automates the buying and selling of online advertising space to several global clients.  

Altice and Morgan Stanley declined to comment. Teads did not respond to requests for comment.