Oi board approves sale of PT’s Portuguese operations to Altice for EUR7.4bn

9 Dec 2014

Brazilian telco Oi SA has confirmed that its board of directors has approved plans to sell its ‘PT Portugal Telecom SGPS’ (‘PT Portugal’) operating unit to Altice Portugal, a wholly owned subsidiary of Altice Group of Luxembourg. Altice’s final bid for PT Portugal is EUR7.4 billion (USD9.2 billion), including a EUR500 million deferred payment related to the Portuguese business’ future performance. Oi clarifies in its press release that the deal does not include the Africatel holding company, Timor Telecom or the debts attributed to Rio Forte Investments, and therefore these three assets must be separated from PT Portugal prior to the approved sale to Altice. As a minor footnote, alongside the main Portuguese fixed line, broadband and mobile telecoms assets, the restructured PT Portugal unit would retain a 45% stake in Hungarian satellite data transmission company HDT (Hungaro Digitel). Oi adds that the closing of the sale to Altice is conditional on regulatory and antitrust approvals, alongside approval from shareholders of holding company Portugal Telecom SGPS which will be sought ‘in due course’.

However, according to Bloomberg, a potential complication to the takeover is the involvement of the aforementioned Portugal Telecom SGPS, whose main asset is a 25.6% stake in ‘CorpCo’, the entity created by the ill-fated merger between Portugal Telecom (PT) and Oi. According to people familiar with the matter, Portugal Telecom SGPS has veto rights over a sale of Oi’s Portuguese assets. The holding company is expected to convene a shareholder meeting imminently.

Last month Isabel dos Santos, the daughter of Angola’s president and Africa’s richest woman, offered EUR1.2 billion for Portugal Telecom SGPS via her Terra Peregrin holding company. If Oi sells the Portuguese assets to Altice, it is ‘very probable’ that dos Santos will drop the bid for Portugal Telecom SGPS, Mario Silva, a board member of one of dos Santos’s companies, told Bloomberg reporters earlier this month.

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