Portugal Telecom shareholders approve €7.4B deal with Altice

Shareholders in Portugal Telecom SGPS (PT SGPS) finally approved the €7.4 billion ($8.4 billion) sale of Oi's Portuguese telecoms assets to Altice, ending uncertainty over a deal first announced in December.

While Oi had already approved the sale of all shares in PT Portugal to Altice Portugal (Altice PT), approval by PT SGPS was postponed until Jan. 22 in order to provide information requested by Portuguese market regulator CMVM. PT SGPS is the holding company that owns a 25.6 per cent stake in the operator created by the merger between Oi with Portugal Telecom.

The remaining hurdles are now largely structural, as Oi works to define which operations are to be transferred and which assets will be excluded from the sale, including investments held by PT Portugal in Rio Forte Investments.

In December Altice said it would take over the existing business of PT Portugal outside of Africa. The deal excludes PT Portugal's Rio Forte debt securities, Oi treasury shares, and PT Portugal financing vehicles. In addition, the cable and mobile group has already 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.

In the event of a favourable shareholder vote on Thursday, Altice had been widely expected to start marketing a jumbo debt deal on Friday to back the acquisition, Reuters reported earlier. Citing unnamed sources, Bloomberg said on Friday that Altice had started marketing more than $6 billion (€5.3 billion) of junk bonds and loans.

"Oi is satisfied with the outcome of the vote," Oi CEO Bayard Gontijo said in Lisbon, Bloomberg reported. "It's the best thing for both companies. It's the best thing for PT Portugal, which will continue providing services of excellence in Portugal, and for Oi to reduce its leverage."

The move effectively unravels the merger agreed a year ago between Oi and Portugal Telecom to create a transatlantic telecoms operator, and will also enable Oi to take part in the consolidation of the Brazilian market.

The operator has already expressed interest in buying Telecom Italia's unit TIM Participacoes, while in turn Telecom Italia's board has given management clearance to explore a tie-up between TIM Participacoes and Oi.

For its part, 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 Portugal, which provides converged offerings under the MEO brand, will complement its existing cable services.

Altice recently completed the acquisition of France-based SFR via cable subsidiary Numericable, creating a new fixed and mobile powerhouse on the French market. The company has also expressed interest in buying rival French operator Bouygues Telecom.

For more:
- see this Oi release
- see this Bloomberg article
- see this Reuters article
- see this separate Reuters article
- see this separate Bloomberg article

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