Altice SA share price down, makes an $8.8-billion binding bid to Oi SA for Portugal Telecom

Altice SA revealed in an official statement that it made a binding bid to purchase the Portuguese assets of Portugal Telecom from Oi SA. According to the companys statement, the offers enterprise value amounts to €7.025 billion ($8.8 billion) and is fully financed by new debt and existing cash from Altice.

The company said in a statement, which was cited by the Financial Times, that it had made “a binding, fully financed offer to purchase the Portuguese assets of Portugal Telecom from Oi”. It also added: “If this offer is accepted, the transaction net of financial debt and other purchase price adjustments would be financed by new debt and existing cash from Altice.”`

Altice revealed that its offer includes the already existing operations of Portugal Telecom, which are located outside of Africa. Some debt securities and financing vehicles are excluded from the takeover bid.

As reported by the Financial Times, the company said in its statement: “The offer submitted by Altice values these assets at an enterprise value of €7.025 billion on a cash and debt free basis, which includes a €400 million earn-out related to the future revenue generation of Portugal Telecom and a €400 million earn-out related to the future generation of Operating Free Cash Flow (EBITDA less Capex).”

The transaction offer comes after it recently finalized a deal for the acquisition of French mobile phone operator SFR. The company already holds other cable businesses – Cabovisao and Oni in Portugal. That is why the acquisition of Portugal Telecom is considered to provide Altice with the opportunity to consolidate the market.

Altice has been focused on seeking new purchases in order to expand its presence in Europe. In April 2014 the companys French subsidiary Numericable Group SA reached an agreement to buy the second-biggest mobile operator in France – SFR – from Vivendi SA in a deal estimated to $23 billion. The deal received approval from the antitrust authorities last week.

Altice SA lost 0.68% to trade at €49.35 per share by 9:45 GMT in Amsterdam. The company is valued at €12.31 billion. According to the Financial Times, the 3 analysts offering 12-month price targets for Altice SA have a median target of €45.00, with a high estimate of 653.00 and a low estimate of €37.00. The median estimate represents a -9.44% decrease from the previous close of €49.69.