Cable king Patrick Drahi’s Altice seals $9.1 bn buyout of Oi’s Portuguese assets

Brazilian telecommunications company Oi today announced that its board has agreed to accept the €7.4-billion ($9.1 billion) buyout offer for its Portuguese business unit from Altice, the Luxembourg-based telecom group founded by French cable king Patrick Drahi.

The contested deal, which includes assets in Hungary, has a consideration of €500 million related to future profit and cash generation targets.

''With this step concluded, Oi continues its objective of reinforcing its financial capacity in order to maintain its objective of leading the consolidation movement in the Brazilian telecommunications market,'' Oi said in a news release.

Altice bagged the deal after topping a rival bid by private equity firms Apax Partners and Bain Capital. (See: PE firms Bain, Apax table $8.8-bn rival bid for Portugal Telecom's Portuguese unit)

In October last year, Portugal Telecom (PT) and Oi agreed to merge their operations to form a new Brazil-based company with more than 100 million subscribers.

Under the merger, Oi got PT's assets, while the new holding company Portugal Telecom SGPS received a 25.7-per cent stake in Oi.

To complicate the sale, Isabel dos Santos, the daughter of the Angolan president since 1979, José Eduardo dos Santos, made an €1.35-per share buyout offer amounting to €1.2 billion for Lisbon-listed holding company Portugal Telecom SGPS.

Her buyout conditions include acquiring over 50 per cent and no major changes such as a sale of strategic assets, in a bid to become a major shareholder in Oi, and torpedo its sale of its PT Portugal assets.

Oi had rejected her offer, saying it was inappropriate since the sale of the Portugese business had been decided months earlier.

Oi is also seeking to sell other assets in Africa in order to reduce huge debts and focus on its operations in Brazil.

PT is the largest provider of fixed line phones and broadband in the country, with a 52-per cent share. It also holds 41.5 per cent of the mobile market followed by Vodafone with 41.6 per cent and NOS with 16.9 per cent.

Altice Group is a multinational cable and telecommunications company with a presence in France, Israel, Belgium and Luxembourg, Portugal, French West Indies / Indian Ocean Area and Dominican Republic and Switzerland.

It provides cable based services like pay television, broadband Internet and fixed line telephony and, in certain countries, mobile telephony services.

Rio de Janeiro-based Oi, formerly known as Telemar, is Brazil's largest telecommunications company, both in terms of subscribers and revenues. Its major subsidiaries include Telemar and Brasil Telecom.

Oi has 74.5 million subscribers, including 16.9 million landline, 50.3 million wireless, 5.3 million ADSL, and 1 million for other services.