Portuguese cableco Zon Multimedia has initiated formal negotiations with mobile operator Optimus regarding a merger.
The news follows Monday’s merger proposal put forward in a joint statement by Optimus’ parent, Sonaecom, and Zon’s largest…
Portuguese cableco Zon Multimedia has initiated formal negotiations with mobile operator Optimus regarding a merger.
The news follows Monday’s merger proposal put forward in a joint statement by Optimus’ parent, Sonaecom, and Zon’s largest shareholder, Isabel Dos Santos.
In a statement Zon, which operates fixed-line and broadband services alongside pay TV, said it had mandated Espirito Santo and Caixa BI as financial advisors for the possible merger.
The cableco will appoint an ad-hoc committee, consisting of non-executive board members, to oversee the negotiations.
Monday’s proposal from Sonaecom and Dos Santos suggested Zon would absorb Optimus, with a suggested exchange ratio that would see Zon corresponding to 150% of Optimus’ value.
Dos Santos – whose investment comes through Kento Holding Ltd and Jadeium BV – has increased her stake in Zon from around 10% to roughly 30% since the beginning of the year.
Alongside its Portuguese operations, Zon also has MVNO and satellite TV operations in Angola and Mozambique. The merger proposal made mention of the new entity having an increased capacity to invest in emerging markets.
Should the management of both operators be happy with the terms, the merger proposal will be put to the respective shareholders.
A merger between the operators has been predicted for some time. It would create the second biggest telecoms player in Portugal by incorporating the current number three wireless operator into the largest pay-TV company.
The advocates of the deal said this “consolidation scenario” had the most potential to enhance competition in the Portuguese market, which is dominated by incumbent Portugal Telecom and Vodafone.
Optimus is the third largest mobile operator in Portugal with roughly 21% market share and is wholly-owned by Sonaecom.
