Altice offers EUR7.025bn for Portugal Telecom

3 Nov 2014

European telecoms group Altice has announced that it has made a binding, fully financed offer to purchase the Portuguese assets of Portugal Telecom (PT) from Brazil’s Grupo Oi. These assets comprise the existing fixed line and mobile businesses of PT (outside of Africa) and excludes PT’s Rio Forte debt securities, Oi treasury shares and PT financing vehicles. The offer submitted by Altice values these assets at an enterprise value of EUR7.025 billion (USD8.797 billion) on a cash and debt-free basis, which includes a EUR400 million earn-out related to the future revenue generation of PT and a EUR400 million earn-out related to the future generation of operating free cash flow (EBITDA less CAPEX). Altice already owns two Portuguese telecoms operators: cableco Cabovisao (bought in 2012) and business services provider Oni (acquired in 2013).

According to a report from Bloomberg, which cites a person familiar with the matter, Altice representatives have already spoken to Oi stakeholders in Brazil and Portugal, as well as Paulo Portas, Portugal’s deputy prime minister. It has also been widely reported that Oi is keen to conclude a deal for PT, as it needs the money to fund a parallel joint bid for TIM Participacoes (TIM Brasil), in conjunction with America Movil (AM) and Telefonica of Spain; the three telcos seek to break up their Italian-owned competitor and divide its assets between their local units (see separate CommsUpdate story).