Altice To Buy Portuguese Assets Of Portugal Telecom From Oi In EUR 7.4 Bln Deal

(RTTNews) - French cable and telecommunications company Altice S.A. (ATCV.OB) has finally on Tuesday signed a definitive agreement to acquire the Portuguese assets of Portugal Telecom SGPS S.A. (PT) from Brazilian wireless carrier Oi S.A. (OIBR).

The definitive agreement was signed after the Oi board of directors approved the sale of shares of PT Portugal to Altice. The closure of the deal is now primarily subject to approval by the shareholders of Portugal Telecom, as well as regulatory and antitrust approvals.

The deal will see Oi transferring to Altice all of the shares issued by PT Portugal for an enterprise value of 7.4 billion euros or $9.2 billion, on a cash and debt-free free basis. It includes a 500 million euro consideration related to the future revenue generation of Portugal Telecom.

The companies had entered into exclusivity agreement to finalize the terms of the deal on November 30. The move is part of Altice's strategy to expand in Europe, particularly in Portugal and Belgium. The deal will be financed by new debt and existing cash from Altice.

Altice's offer topped a bid from private equity firms Apax Partners LLP and Bain Capital LLC, which teamed up with Portuguese conglomerate Semapa, to make an offer of more than 7 billion euros for the assets.

On November 2, Altice initially floated an offer valued the assets at an enterprise value of 7.025 billion euros or $8.8 billion, on a cash and debt free basis. The offer had then included only 400 million euros earn-out.

Oi was eager to unload the assets to raise funds for paying down debt and for other acquisitions. Oi had hired investment bank BTG Pactual earlier in the year to assist in the divestitures.

The Portuguese assets comprise the existing business of Portugal Telecom outside of Africa, primarily its operations in Portugal and Hungary. However, it excludes Portugal Telecom's investments in Africatel GmbH & Co. KG and Timor Telecom S.A. and Rio Forte Investments S.A. These investments will be exchanged for shares issued by Oi, and all or part of PT Portugal's indebtedness.

The deal comes close on the heals of Altice closing its largest acquisition to date, the $23 billion cash and stock deal to buy French media giant Vivendi S.A.'s (VIV.L, VIVEF.PK) telecom unit SFR, which was agreed in June.

Founded by telecom entrepreneur, Patrick Drahi, Altice is a multinational cable and telecommunications company with a presence in France, Israel, Belgium & Luxembourg, Portugal, French West Indies/ Indian Ocean Area and Dominican Republic and Switzerland.

Altice provides cable-based high quality pay television, fast broadband Internet and fixed line telephony as well as mobile telephony services to residential customers and corporate customers in certain countries.

OIBR closed Tuesday's regular trading session at $0.44, down $0.003 or 7.13% on a volume of 7.13 million shares, and PT closed at $1.50, up $0.02 or 1.35% on a volume of 0.83 million shares.