Altice shares soar on Portugal Telecom bid
Shares in Altice, the parent company of French telecoms operator Numericable-SFR, soared nearly eight percent in trading Monday after announcing it was in exclusive negotiations to buy Portugal Telecom.
The ebullience belied some analysts’ concerns that Altice — a Luxembourg-incorporated group listed on Amsterdam’s stock market and run by Franco-Israeli billionaire Patrick Drahi — was on a giddy buying spree.
Earlier this year, it won a 13.4-billion-euro ($16.7-billion) bidding war for control of France’s number-two mobile phone operator SFR, and last week was given the green light to make an offer for number-four operator Virgin Mobile. Previously, it was reportedly sniffing around the number-three operator, Bouygues Telecom.
“Some are asking whether Altice has eyes bigger than its stomach, but Portugal Telecom is a low-risk acquisition,” Peter Boyland, analyst at IHS Technology, told AFP.
The Portuguese operator “has a good client base in a stable market, while the sector is showing the first cautious signs of economic upturn”.
Altice is offering 7.4 billion euros to take Portugal Telecom off the hands of current owner, Brazil’s Oi mobile phone company.
That trumped a rival offer of just over seven billion euros from investment funds Apax and Bain Capital.
Meanwhile, Isabel dos Santos — an Angola businesswoman and daughter of the country’s president — launched a separate bid to buy the holding company of Portugal Telecom which in turn owns about a quarter of Oi.
Her bid of 1.35 euros per share values Portugal Telecom at 1.2 billion euros, and was dismissed by Brazil’s Oi as “unacceptable” and “ill-timed”.
Joost Vespers, an analyst for the Dutch bank Theodoor Gilissen, underlined the “synergies” in the Altice deal given that it already has a foothold in Portugal where in 2012 it bought the Portuguese cable operator Cabovisao and in 2013 Oni, telecommunications provider for businesses.
However, analysts at ING, who considered it a good offer, said in a note that regulators might force Altice to sell its current activities in Portugal.
Late Sunday, Altice said it was in exclusive negotiations for Portugal Telecom. On Monday, its shares on the Amsterdam market jumped 7.97 percent to close at 58.41 euros.
Altice and Portugal Telecom have three months to reach an accord on the details of the deal, Brazil’s Oi said in a statement.
Altice’s spending spree last month prompted credit ratings agency Standard & Poor’s to downgrade the company’s outlook from stable to negative, though its B3 longterm rating was maintained.