Connect with us


Altice seeks to lure MasMovil, others for $7.3 billion Portugal sale – sources

Altice seeks to lure MasMovil, others for $7.3 billion Portugal sale - sources

By Pamela Barbaglia, Sergio Goncalves and Arno Schuetze

LONDON (Reuters) -Altice Europe NV is sounding out prospective bidders including Spain’s MasMovil for its business in Portugal as it seeks to exit the country after stripping off most of the unit’s infrastructure operations, three sources told Reuters.

The telecoms and cable company led by Franco-Israeli tycoon Patrick Drahi is working with Lazard to prepare the sale of Portugal’s largest telecoms player as part of an auction process that could kick off as soon as July, the sources said.

Major European telecoms firms such as Telefonica and Orange have also been alerted to the upcoming sale along with heavyweight private equity funds with a track record of telecoms investments, the sources said, cautioning a deal is not certain.

Altice, which pioneered 5G in Portugal, owns MEO, the largest landline operator in the country.

A spokesperson for Altice said the company was not planning any sales process “now or in the near future” in Portugal.

Telefonica and Orange declined to comment, while MasMovil was not immediately available for comment.

MasMovil, which owns cable TV operator Nowo in Portugal, is currently competing for 5G spectrum in the country where it would benefit from favourable regulatory conditions for new market entrants.

The Spanish firm, controlled by buyout funds Cinven, KKR and Providence, is keen to expand its presence across Iberia but would struggle to meet price expectations after embarking on a 2.1 billion euro takeover of rival Euskaltel in March, one of the sources said.

Altice, which has the bulk of its operations in France, aims to sell its Portuguese unit for about 6 billion euros ($7.3 billion), representing a multiple of 7 to 8 times its core earnings (EBITDA) of 833.6 million euros, the sources said.

“With such high multiples in mind, the sale becomes more difficult,” the other source said.

In 2020, Altice Portugal’s revenues increased 0.5% to 2.1 billion euros, while its core earnings grew 0.2% to 833.6 million euros.

Other bidders may also struggle to submit competitive bids, the sources said.

Telefonica is still grappling with high debt while private equity funds only pay top dollar for telecoms infrastructure assets where they can extract higher returns, they said.

In a bid to reduce its whopping debt Altice sold most of its infrastructure jewels in recent years, including a 75% chunk of Towers of Portugal (TOP) – which was bought by Morgan Stanley Infrastructure Partners and Horizon Equity Partners in 2018 – and a 49.99% stake in its Portuguese fibre network, which was snapped up by Morgan Stanley Infrastructure Partners for 2.3 billion euros in 2019.

“The main concern is that Patrick Drahi has squeezed out all the juice,” the first source said.

($1 = 0.8206 euros)

(Reporting by Pamela Barbaglia, Sergio Goncalves and Arno Schuetze; additional reporting by Mathieu Rosemain; Editing by Kirsten Donovan and Mark Potter)

Editorial & Advertiser disclosure
Our website provides you with information, news, press releases, Opinion and advertorials on various financial products and services. This is not to be considered as financial advice and should be considered only for information purposes. We cannot guarantee the accuracy or applicability of any information provided with respect to your individual or personal circumstances. Please seek Professional advice from a qualified professional before making any financial decisions. We link to various third party websites, affiliate sales networks, and may link to our advertising partners websites. Though we are tied up with various advertising and affiliate networks, this does not affect our analysis or opinion. When you view or click on certain links available on our articles, our partners may compensate us for displaying the content to you, or make a purchase or fill a form. This will not incur any additional charges to you. To make things simpler for you to identity or distinguish sponsored articles or links, you may consider all articles or links hosted on our site as a partner endorsed link.
Global Banking and Finance Review Awards Nominations 2021
2021 Awards now open. Click Here to Nominate


Newsletters with Secrets & Analysis. Subscribe Now