Oi CEO Bava quits as Portugal Telecom merger falters; international groups jostle for PT takeover

9 Oct 2014

Zeinal Bava has stepped down as chief executive of Brazilian telecoms giant Oi SA after its ongoing merger with Portugal Telecom (PT) was thrown into doubt. Oi announced Bava’s resignation in a statement to the stock market late on Tuesday, with chief financial officer Bayard De Paoli Gontijo serving as interim CEO until a replacement is found. The announcement follows widespread speculation that European cable group Altice is in advanced talks with Oi regarding the acquisition of PT – a move that would require the unravelling of the Portuguese incumbent’s long-standing merger agreement with Oi. According to TeleGeography’s GlobalComms Database, Oi and PT announced plans to merge in October 2013, but have yet to complete the process after encountering numerous setbacks.

Meanwhile, Portuguese business daily Diario Economico has now named UK-based Vodafone Group and Telefonica Group of Spain as interested parties as Altice’s pursuit of PT intensifies. In addition, the journal notes that Altice has already contracted investment banks Goldman Sachs and Morgan Stanley to help it evaluate the proposed purchase of PT; the Portuguese firm is likely to be valued at around EUR7 billion.

In related news, TIM Participacoes (TIM Brasil) has confirmed that it has hired Banco Bradesco to evaluate ‘strategic alternatives’, but has deniedn that the mandate includes preparing a bid for crisis-stricken rival Oi. In a securities filing yesterday, TIM Brasil clarified that assistance from financial consultancies ‘does not constitute a mandate for the evaluation of an offer to buy Oi,’ as previously reported by Reuters.

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