French firm Altice entered 90 days of exclusive negotiations with Brazilian integrated operator Oi, as it seeks to buy the assets of Portugal Telecom.
Its bid places an enterprise value on the Portuguese incumbent of €7.4 billion on a cash and debt-free basis, including a €500 million consideration relating to future revenue generation.
The exclusivity announcement thwarts a rival bid from private equity firms Apax and Bain.
Altice said at the start of November it had submitted a bid of €7.03 billion for Portugal Telecom, including a €400 million consideration relating to future revenue.
The rival private-equity bidders followed up with a slightly higher €7.08 billion bid.
Oi said 90-day exclusivity will enable the two parties to negotiate and agree the final terms of the deal, while also securing the necessary authorisations.
The Brazilian operator also said Portugal Telecom’s investment in Africatel, Timor Telecom, its ill-fated interest in Rio Forte Investments, as well as its debt, were not part of the deal.
Oi decided to go exclusive with Altice at a board meeting on Friday (28 November).
If the two sides reach a definitive agreement, they are still subject to the approval of the relevant regulatory authorities.
Altice laid some groundwork should its bid for Portugal Telecom prove successful.
The French firm agreed a partnership with the country’s postal incumbent CTT, with the aim of jointly offering services.
Among other things, the two firms will co-operate on the distribution of telecoms services and products and the development of new business ventures that address the e-commerce and financial services markets, the statement said.