Leeway for a three-way? Claro, TIM, Vivo confirm joint Oi bid

20 Jul 2020

Claro Brasil, Telefonica Brasil (Vivo) and TIM Brasil have each separately confirmed that they have submitted a three-way bid for the mobile assets of financially stricken telecoms operator Oi. Telefonica’s announcement notes: ‘The binding offer has been submitted by the aforementioned parties for the examination of Grupo Oi, after the analysis of data and information made available with respect to the business to be acquired, highlighting that it is subject to certain conditions, especially with regards to their selection as ‘stalking horse’ (‘first bidder’), which shall guarantee to them the right to cover the best offer among the other offers presented in the competitive process of sale of Grupo Oi’s mobile business. In case of acceptance of the submitted offer and completion of the operation, each of the interested parties will receive a portion of the aforementioned business.’

Oi, meanwhile, has confirmed its receipt of a second offer, but has not disclosed details of the bidder. Reuters, which cites sources with knowledge of the matter, claims that the other party is a ‘foreign strategic player with a small presence in Brazil’. TeleGeography notes that regional operator Algar Telecom and Singaporean sovereign wealth fund GIC – which acquired a 25% stake in the Uberlandia-based telco in March 2018 – have previously been linked with an approach for Oi’s assets, suggesting they could be the parties behind the mystery bid.

As previously reported by TeleGeography’s CommsUpdate, in June this year Oi confirmed its intention to sell its mobile assets via a ‘competitive process’. Oi requires interested parties to submit sealed bids for 100% of its mobile unit, with a minimum price of BRL15 billion (USD2.9 billion). The mobile assets will be awarded to the bidder who offers the highest price above the minimum price, unless the second highest bid ‘provides greater legal assurances and certainty for the closing of the sale’.

Brazil, Claro Brasil (incl. Embratel & NET Servicos), Oi, Telefonica Brasil (Vivo), TIM Brasil