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HomeAll NewsMost read newsBusiness Leaders Biography
Age : 56
Public asset : 7,426,435,965 USD
Biography : Founder of Altice SA, Altice Europe NV and Altice International SARL, Patrick Drahi is an entreprene

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

06/09/2021 | 02:51pm EDT
FILE PHOTO: An advertising board is seen during the first demonstration of the technology 5G in Lisbon

(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 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 favorable 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 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)


© Reuters 2021
Stocks mentioned in the article
ChangeLast1st jan.
ALTICE USA, INC. 1.92% 34.47 Delayed Quote.-8.98%
EUSKALTEL, S.A. 0.18% 10.98 Delayed Quote.25.49%
KKR & CO. INC. 1.17% 61.42 Delayed Quote.51.69%
LAZARD LTD 0.09% 44.11 Delayed Quote.4.28%
MORGAN STANLEY -1.07% 94.55 Delayed Quote.37.97%
ORANGE 0.66% 9.524 Real-time Quote.-2.16%
TELEFÓNICA, S.A. 1.36% 3.7605 Delayed Quote.15.89%