(Adds comment from Altice, Telefonica)
LONDON, June 9 (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
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 favorable regulatory conditions for new
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
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 fiber 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)