Telecoms holding Altice has entered exclusive negotiations with Brazilian telco Oi for the acquisition of PT Portugal, paving the way for the break-up of the ongoing PT-Oi merger.
Luxembourg-based Altice submitted a €7.4bn (US$9.2bn) binding offer for…
Telecoms holding Altice has entered exclusive negotiations with Brazilian telco Oi for the acquisition of PT Portugal, paving the way for the break-up of the ongoing PT-Oi merger.
Luxembourg-based Altice submitted a €7.4bn (US$9.2bn) binding offer for the Portuguese assets, improving its earlier €7.025bn (US$8.8bn) bid and therefore outbidding PE firms Apax Partners and Bain Capital, which placed a joint binding bid together with Portuguese holding company Semapa last Friday.
Apax and Bain had already made a €7.075bn (US$8.8bn) non-binding offer for the assets on 12 November, but were reportedly looking to improve their offer by €500m.
Altice’s proposal, which will be financed with a combination of cash and debt, includes an earn-out of €500m related to PT Portugal’s generation of future revenues, according to separate statements by Altice and Oi.
The offer excludes PT’s interest in Africatel and Timor Telecom and Rioforte’s €897m (US$1.11bn) debt.
The exclusivity agreement will be valid for 90 days, according to the Oi statement, and the sale will be subject to regulatory approvals.
Last week, Altice announced that it would partner with Portugal’s national postal service CTT to develop and offer joint services if its bid for PT Portugal is successful.
The holding, owned by French-Israeli billionaire Patrick Drahi, is already present in Portugal via its cableco Cabovisao and telecoms unit Oni.
Altice – which also operates in France, Belgium, Luxembourg, Israel, Dominican Republic and the Caribbean – recently closed the €13.5bn (US$16.8bn) merger between its French cableco Numericable and mobile operator SFR.
The telecoms holding is looking to raise up to €5.7bn (US$7.09bn) in the dollar high-yield bond market to fund PT Portugal’s acquisition, as it did with the Numericable-SFR deal, which was mostly financed with US junk-rated debt, according to a Reuters report citing sources close to the deal.
Credit Suisse, Deutsche Bank, Goldman Sachs, JP Morgan and Morgan Stanley are reportedly advising Altice on the debt issue.
Oi announced that it would merge with the Portuguese incumbent in October last year. However, in July, Rioforte, a unit of Portugal’s collapsed Espirito Santo bank, which was bailed out in August, defaulted on €897m (US$1.11bn) of commercial paper it owed to PT, forcing both companies to revise the terms of their combination.
The Brazilian telco is trying to reduce its R$46bn (US$19bn) debt burden by offloading non-core assets to invest in the domestic market, where it is reportedly preparing a joint bid with rivals America Movil and Telefonica for Brazil’s second-largest player, Telecom Italia-owned TIM Brasil.
The bid could reportedly be submitted within days after the PT deal is confirmed.
