Shareholders at Portugal Telecom Holders Approve Deal with Altice

Published Date : Jan 23, 2015

Shareholders at Portugal Telecom SGPS SA sanctioned sale of Luxembourg-based Altice SA at a price of US$8.6 billion. This finally spells a definition for the deal that was in process for a long time. The acquisition will make Altice an important competitor in Portugal, to stand next in line with NOS and Vodafone Group PLC. 

At present Altice also has operations in Israel and Belgium. Patrick Drahi, the owner is firm on his stand that he intends to expand the company’s markets in the present situation and add fixed assets to the mobile assets. Drahi started Altice way back in 1990s by making investment in poorly performing cable companies. He has literally built the company from scratch.

According to the original plan, Portugal Telecom shareholders were supposed to vote for this deal on January 12, 2015. However, this was postponed due to lack of details and alternatives provided by Portugal Telecom. CMVM, the Portuguese markets’ regulator urged for this postponement. The proposed sale is expected to close in the first six months of 2015. 

Portugal Telecom is also in the process of buying Oi SA, the Brazilian telecom company. The former company’s assets have been transferred to Oi. While these mergers and acquisitions are expected to improve the cash position of businesses in Brazil, the move by itself raises questions. In the original plan, the merger was supposed to between equals and be an advantage to both the companies.

Prior to this sale the Brazilian and Portuguese equation suffered a setback. The blow came after it was announced sometime last year that Portugal Telecom had bought bonds issued by Espírito Santo International SA worth EUR900 million, just before it closed down.