Dos Santos offers EUR1.2bn for PT via Terra Peregrin holding company

10 Nov 2014

Isabel dos Santos, the daughter of Angola’s president, Jose Eduardo dos Santos, has launched a takeover bid for certain Portugal Telecom (PT) assets that values the Portuguese company at EUR1.2 billion (USD1.5 billion) and would not disrupt a planned merger between PT and Brazil’s Oi SA (see below). According to the Financial Times, citing a statement published by Portugal’s stock market regulator Comissao do Mercado de Valores Mobiliarios (CMVM) on Sunday, Terra Peregrin, a Portugal-based holding company controlled by Ms dos Santos, said the offer was for EUR1.35 a share, a premium of 11% on PT’s closing price on Friday. The bid is said to be conditional on the holding company acquiring more than 50% of PT’s shares. Meanwhile, according to Reuters, CMVM has suspended the trading of PT shares in order to give investors time to consider the bid.

The bid comes hot on the heels of a differently structured EUR7 billion offer, solely for PT’s domestic assets, courtesy of European cable group Altice. However, Altice’s fully-financed offer excludes some of PT’s debt securities and financing vehicles, and would unwind the long-running merger agreement between the Portuguese firm and Oi.

TeleGeography notes that Ms dos Santos is a leading shareholder in Nos, the Portuguese telecoms group formed via the merger between Zon Multimedia and Optimus. However, the FT reports that the Terra Peregrin offer does not involve the other shareholders in Nos. Nos competes with PT in all areas of the Portuguese telecoms market and the likelihood of a merger between the two companies being approved is minimal.

As previously reported by TeleGeography’s CommsUpdate, in September 2014 PT shareholders voted to accept the revised terms of the telco’s merger with Oi SA, under which PT would have a smaller stake in their new joint company CorpCo. PT will now own a 25.6% stake in the combined entity CorpCo, compared to 39.6% under the original arrangement announced in October 2013. In July 2014 Rioforte Investments, a holding company owned by PT shareholder Espirito Santo, failed to pay EUR847 million of short-term debt, resulting in the Portuguese company having to accept less favourable terms in the merger with Oi. It is believed that Altice’s offer exclusively targets PT’s domestic assets, while dos Santos is eyeing a stake in the enlarged, post-merger business.

Portugal, Oi, Pharol (formerly Portugal Telecom SGPS [PT SGPS])