Drahi extends the deadline for submitting proposals for Altice Portugal

Businessman Patrick Drahi and the Altice Group have extended the deadline for the submission of binding offers by Altice Portugal, without stipulating a maximum, Jornal Economico found. This is another shift in the process that has been ongoing since September last year.

Investment banks Lazard and BNP Paribas were tasked with finding buyers for the company that owns MEO, in September. The process received dozens of expressions of interest, culminating in three candidates submitting binding proposals, from Saudi Telecom Company, the government operator in Saudi Arabia; From the Iliad Group owned by the French millionaire Xavier Niel, who is responsible for the free operator in France; A consortium bringing together the funds Warburg Pincus and Zeno Partners, of which Antonio Horta Osorio was an ally.

But the proposal submitted by the consortium Private equity It offered a much lower price than Altice Europe intended, meaning it was excluded. The value of the offer was about 6 billion euros, which is much less than the amount estimated by Patrick Drahi for the sale of the Portuguese operation, i.e. between 8 and 10 billion euros.

In the second stage of the process, the two candidates began the race Due diligencewhich is still ongoing, as Jornal Economico knows.

But this was not a very structured sales process, and once again Altice decided to open the process to more binding proposals and now “with no deadline,” according to our sources. Trying to get as much consensus as possible may explain this new demarcation of the company founded by Patrick Drahi.

Saudi Telecom Company is considered the most committed candidate to buy Altice, the Portuguese company that owns MEO, as it offered a very high price. Its advisory services include Morgan Stanley (financial consulting) and the PLMJ law firm, specifically with partner Diogo Perestrelo.

According to what Jornal Economico has found, VdA provides legal advice to the French Iliad Group, with a team led by partner Claudia Cruz Almeida, while Société Générale is responsible for financial advisory services.

Founder Patrick Drahi had announced the sale of Altice Group's assets at the end of last year, as a basic measure to reduce debt amounting to $55 billion, including $24 billion associated with the operation in France, according to figures for the third quarter of 2018. Last year.

What is pressuring Altice Group is the fact that financial rating agency Moody's downgraded Altice France's credit rating from B3 to Caa2, putting it just three levels above the 'C' rating, which classifies distressed companies whose debts present a low risk of bankruptcy. Recovery.

The Caa2 rating assigned on Wednesday, March 28, to French business Altice applies to companies whose “liabilities are subject to very high credit risk,” according to Moody's table.

The government has the possibility to intervene in the sale of Altice Portugal under Decree Law No. 138/14 of September 15, which establishes a system for the protection of strategic assets necessary to ensure public security.

The previous government had publicly admitted that it considered Altice Portugal a strategic asset, especially in the field of telecommunications.

The then Secretary of State for Digitization and Administrative Modernization, Mario Campolargo, considered Altice Portugal “a strategic asset of importance for national sovereignty”, giving the example of “the importance of submarine cables, antennas and satellites and also pointing to emergency services services such as SIRESP”.

The sale of Altice requires authorization from several regulatory bodies, from competition (including the European DG Comp), to telecommunications regulators, and the National Security Agency (ANS) due to submarine cables.