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The sale process of Altice Portugal has been dragging on for months and everything indicates that the issue will not be resolved soon. As reported by Economic Daily two weeks ago, the interested party, Saudi Telecom Group, which had made the best offer, withdrew from the process after disagreements with Patrick Drahi over the price to be paid.
To better understand what is happening, we must consider two decisive aspects.
First of all, the French group that owns Altice Portugal is no ordinary company, especially compared to other companies of similar size. Altice Group is a one-man company, regardless of the agreements signed with figures such as Portuguese Armando Pereira (who has “economic rights” to 20% of the profits).
There are no other shareholders who can exert pressure on the sale and resolution of the huge debt problems facing the group. The final decision will be made by Drahi, as was the case recently. The businessman will reluctantly sell Altice Portugal, and he will have some progress and setbacks that are not conducive to the conclusion of the deal.
The second aspect that needs to be emphasized is that AlticePortugal is not an ordinary company. It is the largest telecommunications operator in Portugal, a market leader and owner of important infrastructure.
The sale of Altice Portugal to the Saudi group (which has an Iberia-wide integration project to combine the Portuguese company with Telefonica) is an operation that requires the government’s consent, albeit tacit. This process will also take time.
These two factors would explain the failure of the negotiations with Saudi Telecom. But they are more significant than that. If Saudi Telecom had an investment of 8 billion euros (a value that obviously includes the “premium” of being a telecom company) Player from outside European space) cannot meet Drahi’s demands, so who can?
It remains to be seen how long Altice will be able to delay the sale of its Portuguese unit, and whether the remarkable operational resilience shown by the group will ultimately not be affected by the impasse. Because, shareholder frustrations aside, the telecoms sector has had a tough time, with margins under pressure for years due to digitization and regulators’ actions.
In this context, AlticePortugal is not the only national operator that is at a crossroads and is about to be sold. Perhaps this is an opportunity to rebuild the telecommunications sector along more rational lines, namely a merger between two major telecommunications companies. Playerin return offering the regulator network separation and the creation of a “Telecom REN”. Also, does it make sense to have three fiber optic networks in a country like Portugal?
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