Altice enters exclusive talks with Oi on €7.4B offer for Portugal Telecom

Altice has started exclusive negotiations with Brazil-based Oi to agree a €7.4 billion ($9.2 billion) acquisition of the Portuguese assets of Portugal Telecom (PT Portugal), fending off a rival €7.07 billion bid from private equity funds Apax and Bain, as well as a €1.2 billion offer from Angola-based investor Isabel dos Santos.

 SFR, Altice, Bouygues, Orange, Vivendi

Altice founder Patrick Drahi
Copyright: Aude de Cazenove REA

Negotiations are expected to last three weeks, and could see Altice raising up to €5.7 billion in new debt to fund the purchase, Reuters reported.

The exclusivity agreement came shortly after Altice said it had agreed a partnership with Portuguese postal services provider CTT to develop and offer joint services in Portugal, subject to Altice's successful acquisition of PT Portugal.

Altice previously offered €7 billion for the Portugal Telecom assets in early November. At the time, the multinational cable and telecoms operator said the offer did not include PT's Rio Forte debt securities, Oi treasury shares, or PT financing vehicles.

The move will effectively unravel a merger agreed a year ago between Oi and PT to create a transatlantic telecoms operator. Through the sale, Oi will be able to reduce its debt and raise funding to participate in the consolidation of the Brazilian telecoms market. The operator has expressed interest in buying Telecom Italia's unit TIM Participacoes, while in turn Telecom Italia's board has given the management clearance to explore a tie-up between TIM Participacoes and Oi.

For Altice, the PT deal comes only days after it completed the acquisition of France-based SFR via cable subsidiary Numericable, creating a new fixed and mobile powerhouse on the French market.

Altice has made no secret of the fact that it is looking at opportunities in every country where it is present and is a strong advocate of fixed and mobile convergence as well as in-market consolidation. In Portugal, the company already operates Cabovisao; the addition of mobile and fixed assets from PT, which provides converged offerings under the MEO brand, will complement its existing cable services.

It was also separately reported that Portugal Telecom has approved the merger of its units PT Comunicacoes (PTC) and MEO in order to bring all services into one company. The company already markets all fixed, mobile and media services under the MEO brand; according to a report in Publico the company will be renamed MEO - Communications and Multimedia Services after all MEO assets are transferred into PTC.

For more:
- see this Altice release on PT
- see this Altice release on CTT
- see this Publico article (in Portuguese)
- see this Reuters article

Related Articles:
Altice completes SFR deal, gets green light for Virgin Mobile purchase
Altice sees itself as 'natural buyer' of France's Bouygues Telecom
Portugal Telecom receives Altice counter-offer
Altice makes €7B bid for Portugal Telecom
Report: Oi hires Barclays to assess sale of Portugal Telecom towers

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