(Recasts with executive’s comments)
SAO PAULO, Nov 13 (Reuters) - Brazilian telecommunications firm Oi SA is in no rush to sell the Portuguese assets it acquired in a recent merger as bids could improve, Chief Executive Bayard Gontijo said on Thursday.
Private equity firms Bain Capital LLC and Apax Partners LLP made an offer on Wednesday valued at 7.08 billion euros ($8.82 billion) to buy Portugal Telecom SGPS SA’s Portuguese operations from Oi. The bid followed an offer valued at 7.025 billion euros from French telecoms group Altice SA.
“We have no concerns about how long it will take (to sell assets),” Gontijo said on an earnings call. “We have offers. They’re interesting, but could be improved.”
Oi is considering selling Portuguese assets to reduce its debt of over $18 billion, effectively unwinding part of a protracted merger of Oi and Portugal Telecom. The Rio de Janeiro-based company is also expected to use any proceeds from the sale of the Portuguese assets to strengthen its hand in the consolidation of Brazil’s telecoms industry.
According to Gontijo, a tie-up is the best solution to the headwinds in the Brazilian market, highlighted by a plunge in Oi’s third-quarter profit reported on Thursday.
Both offers for the Portuguese assets include similar “earn-out” clauses which pay up to 800 million euros of the price only if the business hits certain revenue and profit targets.
Oi is now asking for a guaranteed pay-out of at least 7 billion euros, free of any such earn-out discounts, according to a report published in newspaper Folha de S.Paulo on Thursday. A spokeswoman for Oi declined to comment on the Folha report.
Preferred shares of Oi were unchanged at 1.32 reais in Thursday trading.
$1 = 0.8020 euros Reporting by Asher Levine; Additional reporting by Brad Haynes and Alberto Alerigi Jr.; Editing by Greg Mahlich and Meredith Mazzilli