Oi has dismissed an offer made by Angolan businesswoman Isabel dos Santos for Portugal Telecom SPGS, the holding company which owns a 25.6% stake in the operator created by the merger of the Brazilian telco and Portugal Telecom (PT), saying it is…
Oi has dismissed an offer made by Angolan businesswoman Isabel dos Santos for Portugal Telecom SPGS, the holding company which owns a 25.6% stake in the operator created by the merger of the Brazilian telco and Portugal Telecom (PT), saying it is “unacceptable”.
In a statement late on Monday, the company stressed its management board unanimously decided to reject any changes to the terms of its planned merger with the Portuguese incumbent.
In an earlier statement, Oi had described the bid as “untimely”.
On Sunday, Terra Peregrin, a Lisbon-based holding company owned by dos Santos, submitted a €1.2bn (US$1.4bn) bid for PT SPGS.
The offer comes as Oi is considering its options for PT and other assets it inherited from the merger with the Portuguese telco, first announced in October last year, in order to reduce its R$46bn (US$19bn) debt load and to explore M&A opportunities in Brazil.
Although the Brazilian operator now has majority control over PT, dos Santos could get a say in Oi’s strategy if she were to acquire PT SPGS.
As part of her offer, dos Santos, who is Africa’s richest woman, has already requested that Oi does not sell any strategic assets, which would thwart Altice’s €7.03bn (US$8.8bn) bid for PT.
Dos Santos, who is a controlling shareholder in Portugal’s second largest carrier Nos, is looking to play a more active role in the consolidation process of the Portuguese telecoms industry, analysts told TelecomFinance.
Last week, Nos’ controlling shareholder Zopt reportedly issued a statement saying it would be willing to cooperate with Oi and PT to help defend the national interest.
A deal could also potentially give her greater control over Unitel, Angola’s largest wireless player, in which she has a 25% stake.
Oi is currently looking to sell its own 25% interest in the Angolan telco, which it owns via Africatel, but has yet to find a buyer for the asset.
Dos Santos’ offer requires an acceptance level of more than 50% but analysts told TelecomFinance that the bid is unlikely to be approved by PT SPGS’ shareholders as it undervalues the company and would delay the Oi-PT merger, which is about to complete.
Should her bid be successful, dos Santos, who has reportedly mandated Caixa-Banco de Investimento as financial adviser, would also face regulatory hurdles because of her controlling interest in Nos, one of the analysts said.
PT financing
Meanwhile, a number of banks are working on two loan and bond financing packages of around €5bn (US$6.2bn) to finance bids for PT, according to a Reuters report citing lending sources.
The financings, which for most part will be raised in dollars, will reportedly be between 4x and 5x PT’s €1.1bn EBITDA multiple.
Besides Altice, other potential bidders for the asset reportedly include PE firm Apax Partners in partnership with Bain Capital, as well as Portuguese entrepreneur Miguel Pais do Amaral who, according to local reports, would be supported by a number of investment funds.
CVC Capital, which was earlier tipped as one of the potential suitors, is no longer interested in the asset, according to an unsourced Portuguese media report.
Credit Suisse, Deutsche Bank, Goldman Sachs, JP Morgan and Morgan Stanley are rumoured to back Altice, while Bank of America Merrill Lynch, Barclays and UBS will reportedly fund Apax’s offer.
