It’s hard to remember the time when it felt like the sale of the mobile division of cash-strapped Brazilian operator Oi might not happen. Now it’s turning into a real competition as two sets of buyers manoeuvre for position.
Brazilian operators TIM Brasil, Telefonica Brasil and Claro Brasil had already looked like favourites to take on the mobile assets of Oi after an initial joint bid last week. Then it was announced that the best binding offer above the minimum price established for the assets had come from Brazilian tower operator Highline do Brasil II Infraestrutura de Telecomunicacoes. Highline was then granted exclusivity in negotiations over the sale of Oi’s mobile business.
Now the ball may be back in Highline’s court, with a number of reports suggesting that the three-operator consortium has submitted a new bid of around $3.2 billion for the mobile assets of their rival operator.
The first offers, from both parties, had been closer to the minimum acceptable bid of about $2.9 billion defined by the seller. However, the choice of winner, Oi stressed, may also favour whoever provides “greater legal assurances and certainty for the closing of the sale”, which may explain why Highline was initially favoured.
TeleGeography's CommsUpdate reports that, under the terms of the new offer, the three mobile giants have requested ‘stalking horse’ (first bidder) status. This apparently means that they have the right to make a higher bid than the best offer among the other offers presented.
Further complicating matters, Oi has already had a binding offer, worth about $201 million, for its tower unit from Highline, which became a portfolio company of US private equity firm Digital Colony last year.
Whoever wins, what happens to Oi is not yet clear. Will its assets be sold or shared? Will it continue? We probably won’t know until the bidding process is over, and right now, it’s hard to say how long that could take.