Africa’s richest woman Isabel dos Santos is poised to widen her wealth margin. Her latest offer is for a 25.6% stake, representing € 1.2 billion in one of Brazil’s leading telecom operators, Oi.
Here Is The Deal:
Isabel dos Santos is making a preliminary offer for the acquisition of shares of Portugal Telecom SGPS, a company in the process of merging with Oi, for a total of € 1.2 billion.
- Hence, if the merger becomes successful and Isabel finally acquires the 25.6% stake in Portugal Telecom SGPS, she would invariably be holding a 25.6% stake in Oi Telecom.
- But it appears she is doing this as a strategy to block the sale of Portuguese Telecom assets by Oi, of which she may be affected. In the merger with Portuguese Telecom, the Brazilian Oi Telecom incorporated the PT Portugal subsidiary, which brings these assets together.
- In order to raise funds for the consolidation of the telecommunications market, Oi is going to sell the operational PT after the merger.
- The move comes just days after European group Altice voiced interest in the PT’s assets in Portugal for about € 7 billion. Terra Peregrin, controlled by Isabel, said it was willing to pay € 1.35 per share of PT, an 11% premium. But Isabel appears to have an edge because she is a shareholder of the Portuguese operator competitor NOS. The negotiations for the Portuguese assets continue and new proposals may be presented.
- The eventual offer of £1.2 billion by Isabel is coming with a condition: Isabel wants the merger between PT and Oi to be suspended until the 30th day after the settlement of the offer. The Board of Oi seems stuck at this point. It recently announced that it is considering “untimely” changes in agreed terms in the process.
- Isabel is not seeing this deal as a hostile one at, all. Her spokesman told Portuguese newspapers that the offer for the shares of PT SGPS is not “hostile” and has as its objective the acquisition of a minority stake in Oi, allowing the maintenance of the Portugal Telecom group unit.
- Once the merger is completed, the holding company PT SGPS no longer has the assets but has a relevant stake in Oi and the right of veto in strategic decisions. The share of PT SGPS in Oi is 25.6% and may be raised to 37.3% within six years.
- The movement, according to the spokesman, was made in harmony with the objectives set out in a joint statement issued by Zopt last week. Zopt, the operator of the operator NOS, announced that it entered the battle for PT to defend the “national interest”.
But The Price Offer May Be Far From It
£1.2 billion? That may seem a serious far-cry from analysts. The Association of Investors and Technical Analysts of the Capital Markets, an entity that brings together minority shareholders of PT, has since issued a statement in which it supports the increase of the offer to € 1.94 per share – the value corresponds to the average share price in the six months prior to the offer.
Shares in Portugal Telecom, Lisbon, closed up 11.83%, to € 1.36 on Monday. Oi’s preferred shares rose 6.67% to R $ 1.28.
“If the offer is in fact serious and with the intentions described, the offeror should review it for the purposes of mandatory bidding, in particular by adjusting the counterpart (…). Otherwise, said offer can only be understood as a fun and strategic maneuver aimed at other interests, “the statement said.
A Simpler Picture
- Portugal Telecom SGPS is a holding company that is a partner of the Brazilian operator Oi, with 25.6% of the shares.
- The stake was originally 37.3% but was reduced after Portugal Telecom bought 897 million in commercial paper from Rioforte, an arm of the Espírito Santo Group (GES), without the knowledge of the Brazilian operator’s direction and despite the economic fragility of the conglomerate, of which PT is a member.
- The company took default in July. In addition to having a reduced share in Oi, PT SGPS is also the “owner” of the debt left by Rioforte. As Gores, owner of Rioforte has entered into judicial reorganization, the market finds it unlikely that the money will be recovered.
- Isabel is considered a symbol of the “influence of power and wealth in Angola,” according to the Financial Times.
- In an interview published in the diary in 2013, the Leading Business Woman of Africa described herself as an ordinary person, who drives on her own in Luanda and faces traffic like anyone else.
- Africa’s richest woman’s fame, however, is that of an influential business woman who has created thousands of jobs to Angolans. “I do business.”
Isabel Dos Santos At A Glance
Aged 46, with a net worth of $2.3 billion, Isabel Dos Santos is the 8th richest person in Africa. She owns shares of Portuguese companies, including telecom and cable TV firm Nos SGPS.
In one of her interviews, Africa’s richest woman shared her advice to entrepreneurs:
‘‘Your best business bet is you, your skills, your motivation, and your passion.
You must have an idea, make a five year plan, prepare your money, ground your idea in detail, be persistent, and partner yourself with a trusted team. Stay passionate always, and execute — don’t delegate.’’
Charles Rapulu Udoh
Charles Rapulu Udoh is a Lagos-based Lawyer with special focus on Business Law, Intellectual Property Rights, Entertainment and Technology Law. He is also an award-winning writer. Working for notable organizations so far has exposed him to some of industry best practices in business, finance strategies, law, dispute resolution, and data analytics both in Nigeria and across the world.