Ganzi’s Brazilian company set to snatch Oi from rival buyers

Ganzi’s Brazilian company set to snatch Oi from rival buyers

27 July 2020 | Alan Burkitt-Gray

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A company bought last December by Marc Ganzi’s Digital Colony is set to buy bankrupt Brazilian operator Oi within the next few days.

The company, São Paulo based Highline do Brasil, has a one-week exclusive period – until next Monday, 3 August – to negotiate for Oi at more than the equivalent of US$2.9 billion, which is the sum bid by a consortium of América Móvil, Telefónica and TIM.

It’s only a week since the local branches of the three submitted what they called a “binding offer” for Oi, offering to pay $2.9 billion. According to reports from Brazil, Highline, an independent telecoms infrastructure company, will pay more than that, and other reports say it will exceed any higher offer from the consortium.

Digital Colony, which owns telecoms infrastructure including fibre carrier Zayo, bought Highline do Brasil – officially Highline II Infraestrutura de Telecomunicações – in December 2019 from a Latin American private equity investor, Pátria Investments, which is an associate of Blackstone.

Neither party quoted a price for that deal. At the time Digital Colony said that Highline “has a portfolio of wireless infrastructure assets, including macro towers, which spans all the major urban, suburban, and rural areas of Brazil”.

It added: “The company counts all of Brazil’s major mobile network operators including TIM, Vivo, Claro and Oi as its customers.”

Vivo is the local brand of Telefónica in Brazil, while Claro is the local brand of Mexican operator América Móvil. Thus Highline is set to buy one of its four customers, Oi, in competition with three of its others.

Last month Oi said that it planned to split itself into four units – towers, data centres, mobile assets and fibre infrastructure – to facilitate separate sales, but it is not clear whether Digital Colony’s Highline will want to maintain that split.

Reports from Brazil say that this is the first time Digital Colony has considered moving into the retail telecoms market.

Steven Sonnenstein, a managing director at Digital Colony, said in December: “As Brazilian MNOs [mobile network operators] increase their 4G coverage, seek to augment capacity in the country’s dense urban areas and prepare their networks for 5G deployment, there is a significant opportunity for Highline to grow. We look forward to expanding on what Pátria has built and to helping the business serve its customers.”

Highline do Brasil specialises in four areas on which Ganzi has focused Digital Colony over the past few years – cell towers, rooftop towers, indoor coverage and small cells. The Oi purchase, if it goes through, would be its first retail telecoms business.