Altice has firepower to bump PT Portugal bid
Altice [AMS:ATC] has the capacity to increase its offer for PT Portugal, it is understood.
Bain and Apax revealed a bid for PT Portugal today, 12 November, that had a number of similarities to the existing Altice bid, but has a number of conditions.
As reported in the statement from Oi [BVMF: OIBR3], the enterprise value of Bain and Apax's offer considers an earn-out payment of EUR 400m related to future revenue generation as well as EUR 400m related to EBITDA generation. The final price is subject to customary adjustments used in the purchase and sale of companies. Also, a final offer is subject to final approval by Apax and Bain Capital’s respective investment committees as well as the completion of legal due diligence by Apax and Bain Capital.
The offer made by Altice on 3 November is fully financed, unconditional and is a long term industrial project for Portugal Telecom, said a spokesperson for Altice. The group is a multinational cable and telecommunications company which already has assets in Portugal, he pointed out.
Unlike Bain and Apax, Altice has a strategic logic behind its bid meaning that it is not as constrained by financial restrictions. Altice’s press release states that it has completed due diligence. It would be ready to sign imminently, it was said.
A source from the Apax-Bain camp noted that Apax and Bain are large important funds that can get the financial structure in place. The source conceded that its financing is different than that of Altice, which has the financial firepower to pull the trigger at any moment. But, Altice is paying high fees to all the banks it is working with, this source claimed.
Altice has secured financing from JP Morgan, Credit Suisse and Deutsche Bank for its EUR 7.03bn bid for PT Portugal. The Apax/Bain bid is based on an enterprise value of EUR 7.075bn.
Oi appears so far to have not given clear dates of a process to the bidding parties. The bids for PT Portugal would not normally require shareholder approval from Oi shareholders.
However, this appears to be a grey area after the bid for Portugal Telecom at the Holding Company level from Isabel dos Santos.
Dos Santos, whose father is the Angolan president, has offered EUR 1.35 per share for PT SGPS [LIS:PT] , the listed holding company that previously held PT Portugal but now owns a 25.6% stake in Oi. Even though the dos Santos offer is directed at PT SGPS, Oi has said it is inopportune offer and rejected any changes to the terms of its merger agreement.
PT Portugal declined to comment. Oi and PT SGPS were not immediately available to comment.