Altice eyes 5.7bn financing for Portuguese acquisition

lunes 1 de diciembre de 2014 06:11 GYT

By Robert Smith

LONDON, Dec 1 (IFR) - Telecoms group Altice could raise up to 5.7bn (US$7.09bn) in fresh debt to fund the purchase of Grupo Oi's Portuguese operations, according to sources close to the deal.

The deal is the latest in a two-year acquisition spree that Altice has mostly financed with junk-rated debt. In April, it raised the largest ever high-yield bond financing in history, a US$16.7bn-equivalent transaction, to finance Numericable's acquisition of SFR.

Altice bid 7.03bn for the group last month, but asked its underwriting banks to up their commitments on Thursday, so it could boost its offer to 7.4bn to beat a rival bid from private equity funds Apax and Bain.

The 7.4bn bid includes a 500m earn out related to Portugal Telecom's future revenue generation and around 1.1bn to 1.2bn of pension liabilities.

This leaves a 5.7bn cash consideration, the "majority if not all" of which will be debt, according to a banker on the deal, who expects the bulk to be raised in the dollar high-yield bond market.

"The cheapest cost of capital is in dollar bonds, and Altice's CFO Denis Okhuijsen has favoured that market in the past," he said.

Most of the financing for Numericable's acquisition of SFR was raised in the dollar bond market, for example, even though both companies are French with purely euro cash flows. Numericable and SFR now make up the company's Altice France business.

Altice can raise debt for the Portuguese acquisition at more than one entity, however. The Portuguese assets will be bought by Altice International, which has acquired companies from Israel to the Dominican Republic using a mix of secured and unsecured bonds as well as syndicated loans.   Continuación...