Altice-Numericable in talks to buy Portugal Telecom

Just ahead of his imminent acquisition of French telco SFR, cable operator Numericable’s owner Patrick Drahi has turned his attention to Portugal Telecom as his next major target, according to various reports. 

Drahi’s investment vehicle Altice is in talks to acquire Portugal Telecom, and may be the only candidate in play, according to a source cited by AFP.

The Portuguese telco has been involved in a tortuous merger process with Brazilian alternative service provider Oi that has yet to be completed. The Portuguese service provider is controlled by PT Portugal, which has been valued at €6.7 billion by Espirito Santo and €7.3 billion by HSBC.

Portugal Telecom SGPS SA, the holding company that controls a minority stake in Oi, which is the major shareholder in both the Brazilian and Portuguese operations, has been valued at €1.5 billion. Portugal Telecom SGPS SA holds €897 million in debt that was defaulted in July by a subsidiary of bank Espirito Santo International.

Oi is believed to be interested in selling out of Portugal Telecom in order to fund its ambitions to act as a consolidator within Brazil, where it is attempting to put together a bid for Telecom Italia-backed TIM Brasil. Brazilian press have predicted that an announcement could be made after the second round of the country’s presidential election is completed on October 26.

Altice is already present in Portugal, having acquired cable operator Cabovisão in 2012 from Canada’s Cogeco Cable. It also owns enterprise-focused telecom service provider Oni, and the company has adopted a strategy of looking at all consolidation opportunities in markets where it already has a presence. The acquisition of Portugal Telecom would give it the number one position in the local market, possibly leading the regulator to request remedies ahead of any approval.