PARIS/NEW YORK (Reuters) - Altice founder Patrick Drahi is reshaping his telecoms and cable group for the second time in as many months by splitting its U.S. and European operations, hoping to end a drastic downward share-price spiral.

Heavily indebted Altice ATCA.AS said it would spin off its U.S. arm, which owns the country's fourth-biggest cable operator, to existing investors, and would prioritize efforts to turn around its European operations including French telecoms operator SFR.

Altice USA ATUS.N will pay a parting dividend of $1.5 billion to the European arm, to be named Altice Europe. Divestments of non-core assets, some of which are already under way, should also help to pay down debt, Altice said on Tuesday.

Analysts at brokerage Raymond James said that Altice’s European arm as a whole could eventually become an acquisition target for rival French telecoms companies.

"A separate listing of Altice Europe makes a sale of this asset easier, to Bouygues BOUY.PA or Iliad ILD.PA for instance, which could both consider market consolidation synergies in France, in our view," they wrote.

Altice Chief Executive Dexter Goei, however, said that was not on the horizon.

“We’re very focused on the operating story, specifically in France and Portugal,” Goei told reporters during a call. “Over the medium and longer term, I’m certain this question will be asked again and maybe we’ll have a different response.”

Altice's shares in Europe ATCA.AS closed 10.5 percent higher, partially offsetting their fall of about 50 percent in the past 12 months. Altice USA had jumped by more than 15 percent by 1708 GMT.

The group’s leveraged loans also rebounded strongly in Europe’s secondary loan market.

The two companies will be led by separate management teams with Franco-Israeli billionaire Drahi retaining control of both and garnering a large share of the dividend as well as of a $2 billion share buyback planned by Altice USA.

Dennis Okhuijsen, Altice’s current chief financial officer, will become CEO of Altice Europe and Dexter Goei will continue to serve as chief executive of Altice USA.

No new executive recruitment was announced, however, with Altice remaining managed by the same close team that has seen it transform from a small France-based company into a global group.

Several analysts said that this light and centralized top management may hamper Altice’s capacity to define an efficient and clear marketing strategy in each of its markets.

Altice, whose operations stretch from Israel to the Dominican Republic, saw its shares plummet after a financial report signaled it would fail to grow in France in 2017, despite large investments in mobile and fixed networks.

This led to the ousting of Altice’s chief executive, a rare apology by Drahi to investors at a conference last year and the promise that Altice, whose debt equals more than twice its yearly revenues, would shift focus from large acquisitions to sales growth and debt management.

ACQUISITION SPREE

Altice has grown rapidly through acquisitions in the United States and Europe, helped by cheap debt that has risen to around $60 billion -- more than five times its annual core operating profit.

FILE PHOTO: Patrick Drahi, Franco-Israeli businessman and Executive Chairman of cable and mobile telecoms company Altice, speaks during the launch of the news channel BFM Paris, in Paris, France, November 7, 2016. REUTERS/Benoit Tessier/File Photo

In the United States, Drahi spent $28 billion in 2015 to buy cable companies Suddenlink and Cablevision, and even flirted with a $185 billion bid for cable giant Charter CHTR.O.

The company largely fulfilled its promise to cut costs aggressively at the businesses it bought but often failed to achieve the operational turnarounds and growth it targeted.

Altice NV, which is based in the Netherlands, aims to complete the spinoff of its 67.2 percent interest in Altice USA by the end of the second quarter, following regulatory and shareholder approvals.

The listed U.S. business, no longer owned by Altice NV, will then be shielded from concerns about the European operations, while its liquidity will quadruple to 42 percent of total shares outstanding.

“With U.S. activities clearly split, the contagion effect will not be felt,” said Thomas Coudry, an analyst at Bryan, Garnier & Co.

Drahi will own 52 percent of Altice Europe and 43 percent of Altice USA.

Altice’s managers had in the past said that potential risks associated with the company’s consolidated debt were alleviated by the so-called “silo structure” of the group, under which each entity would have to make its own repayments.

Drahi has recently shifted gears, saying there was a path to further strengthen the European balance sheet over the long term through non-core asset disposals, such as telecom towers.

Altice is also hoping to raise as much as 3 billion euros from the sale of its Dominican Republic business, sources told Reuters in November.

($1 = 0.8388 euros)