Is the sale of Brazilian telecommunications group Oi’s mobile unit finally about to be agreed?
News reports indicate that Oi has entered into an exclusivity agreement with its rival operators Telefonica Brasil, Claro Brasil and TIM Brasil over the sale of its mobile business, after the consortium raised its initial offer.
As we reported earlier, the raised bid was because Oi had granted the joint bid ‘stalking horse’ or first bidder status. This essentially allowed the three operators to make a higher bid than the best other offers.
According to TeleGeography's CommsUpdate, the new bid went well beyond the $2.9 billion dollar threshold to offer $3.2 billion for Oi’s mobile assets. Until the new offer was presented, however, it had looked as though Oi would favour a bid from Brazilian tower operator Highline do Brasil II Infraestrutura de Telecomunicacoes, which became a portfolio company of US private equity firm Digital Colony last year.
Oi will presumably focus on its broadband business from now on but what will happen to its mobile business isn’t clear. It’s quite likely that Brazil will now be a three-operator market.
Meanwhile, if news from Reuters proves correct, Oi has more funds coming its way after unconfirmed reports that Latin American fibre optic network company Ufinet has made a non-binding offer for Oi’s fibre unit.
As part of its restructuring plan to exit bankruptcy protection, which also includes the mobile sale, Oi aims to sell up to 51 percent of its fibre infrastructure unit InfraCo.
Ufinet, which is owned by Italian utility Enel and private equity firm Cinven, already has more than 70,000 kilometres of optical cable networks in Latin America. However, Ufinet is not the only bidder for this unit. An infrastructure fund, managed by Banco BTG Pactual SA, and Highline do Brasil are also reportedly involved.