Altice SA announced that it has started exclusive negotiations to acquire the Portuguese assets of Oi SA. The price of the deal is estimated to about €7.4 billion ($9.2 billion). The bid of Mr. Patrick Drahis company is considered to fend off a competitive acquisition offer made by Apax Partners LLP and Bain Capital LLC.
According to the companys statement, a consideration of €500 million related to the future revenue of Portugal Telecom is included in the takeover bid of the cable company. The initial offer of Altice, made on November 2nd, amounted to €7.025 billion, followed by Apax and Bains rival bid of €7.075 billion on November 12th.
As reported by the Wall Street Journal, Altice revealed that it has entered an “exclusivity agreement” with Oi to agree on the final terms for the Portuguese assets sale. This is considered the latest high-profile takeover deal for the cable and telecommunications group, which is under the lead of Mr. Patrick Drahi.
The deal for Ois Portuguese assets is considered the latest one in a series of mergers, which have been carried out in Europe. Telecom companies have been recently focused on merging fixed and mobile assets in order to make the so-called quadruple-pay offers that unite broadband, mobile, fixed telephony and television services.
The acquisition comes only a year after Oi reached an agreement with PT to combine. The sale proceeds are expected to be used by Oi for paying down its debt. In addition, the deal is also considered as the latest sign of Altices desire to expand its reach in Europe, only a few months after the acquisition of Vivendis SFR unit in a deal estimated to €17 billion.
Altice SA added 5.18% to trade at €56.90 per share by 10:05 GMT. The company is valued at €13.41 billion. According to the Financial Times, the 4 analysts offering 12-month price targets for Altice SA have a median target of €49.00, with a high estimate of €75.00 and a low estimate of €39.00. The median estimate represents a -9.43% decrease from the last price of €54.10.
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