Oi Board Finalizes Approval For Sale Of PT Portugal Shares To Altice

(RTTNews) - Brazilian wireless carrier Oi S.A. (OIBR) announced Monday that its board of directors have finalized the formalities to approve the general terms and conditions for the sale of the Portuguese assets of Portugal Telecom SGPS S.A. (PT) to French cable and telecommunications company Altice S.A. (ATCV.OB).

The closure of the deal is also primarily subject to approval by the shareholders of Portugal Telecom, a corporate reorganization of Portugal Telecom as well as regulatory and antitrust approvals.

The corporate reorganization will see the separation of PT Portugal's investments in Africatel GmbH & Co. KG and Timor Telecom S.A. and Rio Forte Investments S.A. These investments will be exchanged for shares issued by Oi, and all or part of PT Portugal's indebtedness.

Following the board approval, Oi will transfer to Altice all of the shares issued by PT Portugal for an enterprise value of 7.4 billion euros, on a cash and debt-free free basis, including 500 million euros consideration related to the future revenue generation of Portugal Telecom.

The companies had entered into exclusivity agreement to finalize the terms of the deal on November 30. The move is part of Altice's strategy to expand in Europe, particularly in Portugal and Belgium. The deal will be financed by new debt and existing cash from Altice.

Altice's offer topped a bid from private equity firms Apax Partners LLP and Bain Capital LLC, which teamed up with Portuguese conglomerate Semapa, to make an offer of more than 7 billion euros for the assets.

The Portuguese assets comprise the existing business of Portugal Telecom outside of Africa, primarily its operations in Portugal and Hungary. However, it excludes Portugal Telecom's Rio Forte debt securities, Oi treasury shares and Portugal Telecom financing vehicles.

The deal comes close on the heals of Altice closing its largest acquisition to date, the $23 billion cash and stock deal to buy French media giant Vivendi S.A.'s (VIV.L, VIVEF.PK) telecom unit SFR, which was agreed in June.

OIBR closed Monday's regular trading session at $0.47, down $0.003 or 0.61% on a volume of 6.97 million shares, and PT closed at $1.48, down $0.13 or 8.07% on a volume of 0.89 million shares.