No sooner had the Brazilians bought Portugal Telecom, on advantageous terms, the company is up for sale. This currently is denied by Oi management but it will happen.
The PT merger with Brazilian operator Oi was a takeover in all but name and the Brazilians are now keen to offload PT to the highest bidder to reduce company debt and to fund expansion into new markets, specifically Africa, and to consolidate their market in Brazil.
Oi has yet to receive a formal bid for PT Portugal and today issued a statement to clarify the facts that no decision regarding the possible sale of PT Portugal has been made nor has it received any such proposal.
Oi issued a statement at the request of the São Paulo stock exchange Bovespa in which it "clarifies that, to date, there is no decision as to the disposal of our assets in Portugal."
This means Oi has made a decision and PT will be sold.
The clarification was signed by the Director of Finance and Investor Relations of Oi, Bayard De Paoli Gontijo, after a local newspaper Valor Economico reported on Monday that "Oi will sell all of its shareholding in PT and will focus on its operations in Brazil.”
The Portuguese media reported that the French Altice SA group, led by squillionaire Patrick Drahi, is in talks to buy PT Portugal but that these negotiations "are at a preliminary stage."
"There is a willingness to buy and a willingness to sell," according a source close to the deal who spoke to news agency Lusa and who added that the Portuguese minority shareholders are unable to participate in the process.
The banks involved in the transaction are Morgan Stanley and Goldman Sachs, confirmed the source, as was reported today in the Diário Económico.
Today, Bloomberg noted that the market value of PT Portugal is around €1.5 billion and that "the goal is to reach an agreement on the Portuguese assets within weeks," citing a person close to the matter, who requested anonymity.
PT Portugal is now wholly owned by Oi after the Brazilian increase its capital in May this year.
Altice has had a presence in Portugal since 2012 when it purchases Cabovisão and strengthened its presence in 2013 with the acquisition of Oni.
In a statement released today, Oi "reiterates that it is part of the strategy to seek and analyse alternatives to strengthen and improve our financial flexibility, … and reduce the costs associated with funding and strengthen our liquidity position, including through the eventual disposal of non-strategic assets and investments in subsidiaries."
If Portugal Telecom is no longer strategic, and this looks increasingly likely, it will be sold to the highest bidder, hopefully one that will develop the business, clear out the current management and hang on to the company long enough to remeber where the head office is located.
