Altice in exclusive talks with Oi to buy Portugal Telecom for €7.4bn

Altice is on the cusp of purchasing Portugal Telecom assets in its home market.

Luxembourg-headquartered telco Altice has entered exclusive negotiations to buy Portugal Telecom from Brazil's Oi, with an initial purchase price of €7.4bn on the table.

Altice and Oi announced on Sunday they had entered an agreement that gives the pair 90 days to hash out the final terms of the sale of Portugal Telecom's Portugese assets.

In November, Altice made an initial offer for the assets of just over €7bn but, as the Wall Street Journal notes, private equity firms Apax Partners and Bain Capital placed a subsequent bid valuing the company at €7.07bn.

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Altice's latest bid of €7.4bn includes a €500m consideration relating to Portugal Telecom's future revenue. The deal is only for Portugal Telecom's local assets, meaning its investments in Africatel, Timor Telecom, and Rio Forte Investments and debt would be excluded from the deal, Oi said on Sunday.

Altice also signed a deal last week with the Portugese postal service CTT that stipulates, if the deal proceeds, the pair will work on joint development of initiatives to bolster financial services and online retail in the country.

The agreement with Oi came days after Altice's French cable unit Numericable closed its acquisition of mobile operator SFR, furthering the company's strategy around fixed line and mobile convergence. Vivendi sold SFR to Altice for €13.4bn and a 20 percent stake in the newly-expanded Numericable group.

Altice currently has operations in Belgium, France, Israel, Luxembourg, Portugal, and Switzerland, where it has built out its fixed-line and mobile network assets through a series of acquisitions.

Should a deal with Oi be finalised, Portugal Telecom, which has fixed-line and mobile assets, will significantly bolster Altice's presence in Portugal where it currently runs the Portuguese cable operator Cabovisao.

Altice founder Patrick Drahi told the Wall Street Journal earlier this year that the company is on the hunt for more cable and mobile companies in markets operates in, despite debt incurred from its SFR acquisition.

The company has also indicated its interest in buying France's Bouygues Telecom, a unit of Bouygues, if it were up for sale.

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