Altice to bid for Portugal Telecom?
Luxembourg’s Altice is reportedly in talks with Oi over a bid for Portugal Telecom that could be worth up to $8.8 billion.
Simultaneously, Zeinal Bava, CEO at Brazil’s Oi, has announced his resignation from the company, sparking speculation from some that the proposed merger between Portugal Telecom and Oi may not materialise.
The merger between Oi and Portugal Telecom was expected to complete in April 2014, and was designed to create a 100-million-subscriber carrier to complete with Telefónica and America Móvil in Brazil.
It is now due to close in early 2015, but Portugal Telecom is already a unit of the Brazilian company, and people close to the matter have confirmed Altice’s interest.
“Altice has been eyeing the Portuguese market for some time and there have been talks for several months,” a source told the Wall Street Journal.
Owned by Patrick Drahi, Altice is keen to expand its European telecoms domain, and Portugal Telecom could play an important part of this strategy.
Another source close to Oi said that it would make sense for the company to sell a number of Portugal Telecom’s assets in a bid to reduce the latter’s debt.
“This may help us, providing more financial flexibility for Oi to participate in the ongoing consolidation process of the telecoms industry here in Brazil,” the source said.
In line with such an approach, Oi revealed it was selling its majority stake in Africatel Holding just last month in a bid to reduce its own debt.
Bava joined the company in 2013 from Portugal Telecom – the CEO of which also resigned earlier this year – and Oi’s CFO, Bayard Gontijo will temporarily take on the role as CEO until a replacement has been found.