Businessman Patrick Drahi and the Altice group extended the deadline for the presentation of binding offers by Altice Portugal, without stipulating a limit, Jornal Económico found. It is another turnaround in a process that has been going on since September of last year.
Businessman Patrick Drahi and the Altice group extended the deadline for the presentation of binding offers by Altice Portugal, without stipulating a limit, Jornal Económico found. It is another turnaround in a process that has been going on since September of last year.
Investment banks Lazard and BNP Paribas were mandated to find buyers for the company that owns MEO, in September. The process received dozens of expressions of interest and culminated in three candidates delivering binding proposals, from Saudi Arabia’s state operator, Saudi Telecom; from the Iliad group, owned by French millionaire Xavier Niel, responsible for the Free operator in France; and a consortium that brings together the funds Warburg Pincus and Zeno Partners and which had António Horta-Osório as an ally.
But the proposal from the consortium of private equity offered a price well below that intended by Altice Europa, meaning it was left out. The value of the offer was around 6 billion euros, substantially below the amount estimated by Patrick Drahi for the sale of the Portuguese operation, that is, between 8 and 10 billion euros.
In the second phase of the process, the two candidates in the race began due diligencewhich are still ongoing, Jornal Económico knows.
But this has not been a very organized sales process, and once again Altice decided to open the process to more binding proposals and now “without a deadline”, according to our sources. The attempt to obtain the greatest possible fit may explain this new demarcation of the company founded by Patrick Drahi.
Saudi Telecom is the candidate most committed to buying Altice Portugal, which owns MEO, as it offered a very high price, and its advisory services include the bank Morgan Stanley (financial consultancy) and the law firm PLMJ, more specifically with partner Diogo Perestrelo.
According to what Jornal Económico found, VdA is providing legal advice to the French group Iliad, with a team led by partner Cláudia Cruz Almeida, while Société Générale is in charge of financial advisory services.
The sale of the Altice group’s assets had been announced by founder Patrick Drahi at the end of last year, as an essential measure to reduce the debt of 55 billion, 24 billion related to the operation in France, according to figures from the third quarter of last year.
Putting pressure on the Altice group is the fact that the financial rating agency Moody’s has cut Altice France’s credit rating from B3 to Caa2, leaving it just three levels above the “C” rating, which classifies companies in default and whose debt presents low prospects for recovery.
The Caa2 rating assigned on Wednesday, March 28, to Altice’s subsidiary for the French business applies to companies whose obligations “are subject to very high risk credit”, according to the Moody’s table.
The Government has the possibility of intervening in the sale of Altice Portugal under Decree-Law nº 138/14 of 15 September, which establishes a regime for safeguarding strategic assets essential for guaranteeing public security.
The previous Government had already publicly admitted that it considered Altice Portugal a strategic asset, particularly in the area of communications.
The then Secretary of State for Digitalization and Administrative Modernization, Mário Campolargo, considered Altice Portugal “a strategic asset with importance for national sovereignty”, having given the example of “the importance of submarine cables, antennas and satellites and also referred to the services emergency services such as SIRESP”.
The sale of Altice requires authorization from several regulators, from Competition (including the European DG Comp), to telecommunications regulators, and the National Security Authority (ANS) because of submarine cables.
