Brazilian telco Oi has announced it will sell PT Portugal to Altice for €7.4bn (US$9.1bn), less than10 days after the companies entered exclusive talks.
The Luxembourg-based telecoms group, controlled by billionaire Patrick Drahi, will acquire Oi’s…
Brazilian telco Oi has announced it will sell PT Portugal to Altice for €7.4bn (US$9.1bn), less than10 days after the companies entered exclusive talks.
The Luxembourg-based telecoms group, controlled by billionaire Patrick Drahi, will acquire Oi’s Portuguese and Hungarian assets, which the Rio de Janeiro-based telco inherited from PT Portugal following its combination with the Portuguese incumbent.
Altice, which initially submitted a €7.03bn bid for PT Portugal in early November, later improved its offer to outbid a consortium including PE funds Apax Partners, Bain Capital and Portuguese holding Semapa.
The deal is subject to regulatory clearance and approval from shareholders of PT SGPS, which holds around 25% of the combined Oi-PT Portugal entity.
It includes a €500m earn-out related to PT Portugal’s future revenue generation.
By adding Oi’s Portuguese mobile and fixed assets to its portfolio, Altice will complement its fixed offering in the country, where it already operates via its cableco Cabovisao and telecoms unit Oni. In Hungary, PT Portugal holds a 45% stake in vsat operator Hungaro Digitel (HDT).
Altice – which also operates in France, Belgium, Luxembourg, Israel and the Caribbean – will reportedly finance the deal by issuing high-yield bonds, as it did with the recently closed €13.5bn merger of its French cableco Numericable and local mobile operator SFR.
Altice has been busy building up its asset portfolio this year. Besides PT Portugal and SFR, it also recently completed the acquisition of French MVNO Virgin Mobile. Overall, it has reportedly added more than €13bn in revenues this year to the €3.2bn posted in 2013.
Its next target may be Bouygues Telecom after Altice CEO Dexter Goei recently said his company was the “natural buyer” of the French wireless player.
Dos Santos to withdraw bid?
Oi announced it would merge with the Portuguese incumbent in October last year. However, in July, Rioforte, a unit of Portugal’s collapsed Banco Espirito Santo, defaulted on €897m of commercial paper it owed to PT Portugal, forcing PT SGPS to reduce its stake in the planned merger from 39.7% to 25.6%.
Oi’s African assets – namely Africatel and Timor Telecom – as well as Rioforte investments and “all or part” of PT Portugal’s indebtedness are not included in the sale.
With the Altice deal now agreed, Angolan entrepreneur Isabel dos Santos may decide to withdraw her €1.2bn offer for PT SGPS, which was conditional to Oi not selling any strategic assets.
The move was reportedly aimed at capitalising on synergies in the Portuguese-speaking telecoms sector by linking PT Portugal, Oi and Africatel’s Angolan subsidiary Unitel.
Dos Santos is already present in Portugal via her controlling stake in the country’s second-largest carrier Nos, and in Angola where she has a 25% stake in Unitel.
Oi is actively looking to sell its own 25% interest in the Angolan operator but has yet to find a buyer, it recently said.
The highly-leveraged Brazilian operator has been looking to raise cash to invest in the domestic market, where it has been repeatedly linked to a potential bid for Brazil’s second-largest player, Telecom Italia-owned TIM Brasil.
“With this [PT Portugal] step concluded, Oi continues its objective of reinforcing its financial capacity in order to maintain its objective of leading the consolidation movement in the Brazilian telecommunications market,” the telco said today.
