UK-based private equity firm Apax Partners is reportedly preparing a €7bn (US$8.8bn) bid for Oi’s Portuguese assets in partnership with CVC Capital and Bain Capital.
The firm is looking to match a €7bn binding offer for Portugal Telecom (PT)…
UK-based private equity firm Apax Partners is reportedly preparing a €7bn (US$8.8bn) bid for Oi’s Portuguese assets in partnership with CVC Capital and Bain Capital.
The firm is looking to match a €7bn binding offer for Portugal Telecom (PT) submitted by Luxembourg-based telecoms holding Altice earlier this month, according to a Bloomberg report citing a person with direct knowledge of the matter.
The firms are reportedly confident that their bid, which like Altice’s offer would not include Rioforte’s debt, would be backed by the Portuguese government.
Apax and Bain declined to comment, while CVC did not respond to a request for comment.
Meanwhile, a Reuters report said that Zopt, the controlling shareholder of Portugal’s second-largest player Nos, would be ready to be part of a solution to keep PT in Portuguese hands.
Zopt, which is owned by local conglomerate Sonae and Angolan businesswoman Isabel dos Santos, reportedly issued a statement saying it would be willing to cooperate with the involved parties to help defend the national interest.
On Monday, Patrick Drahi’s Altice offered to buy PT’s business outside Africa, excluding its Rio Forte debt securities, Oi treasury shares and PT financing vehicles.
The deal, which would be funded with a combination of cash and debt, includes a €400m earn-out related to the Portuguese incumbent’s future revenues and a €400m earn-out to do with future operating free cash flow.
However, it might face regulatory hurdles as the company already has an established presence in the country through its cable assets Cabovisao and telecoms unit Oni, while a deal with PE firms might be quicker to clear, analysts were quoted as saying.
Brazil’s Oi agreed to merge with PT a year ago. In early September, the two companies revised the terms of their combination, following Rioforte’s default on a €847m (US$1.1bn) debt payment to the Portuguese operator which forced it to reduce its stake in the combined entity from 37.4% to 25.6%.
Selling PT would enable highly-leveraged Oi to reduce its R$46.2bn (US$19bn) debt pile and free up cash for a consolidation deal in Brazil. Oi and the parent companies of rival operators, America Movil and Telefonica, have reportedly agreed to make a joint R$31.5bn (US$13.1bn) bid to acquire Telecom Italia’s TIM Brasil.
