Whoever wins acquisition of Oi’s mobile unit will have a strong foothold in Latin America’s biggest mobile market
Back in June, Oi announced that it was placing its mobile unit on the market with a reserve price of around $2.9 billion. It was assumed at the time that Telefonica Brasil and TIM Brasil would each take a piece of the financially struggling telco, but, in fact, bidding has quickly grown fierce.
Two weeks ago, TIM Brasil and Telefonica Brasil announced that they had joined with a third party, America Movil, for an undisclosed joint bid for Oi’s mobile assets. At the time Oi, stated there was an unspecified second party also bidding, causing the tripartite consortia to seek permission to match any other bids which may be placed.
Just four days later, it became clear that the second bidder was Highline do Brasil, a portfolio company of US private equity firm Digital Colony, which had put forward a higher bid, exceeding the reserve price. Highline, it seems, is not interested only in Oi’s mobile assets, having also delivered a binding offer for the telco’s tower unit for around $200 million.
Today, it was the consortium’s turn to strike back, raising their offer to $3.21 billion, according to Reuters.
Oi has previously said that the highest bid alone would not be enough to decide who ultimately buys the mobile unit. Other considerations, such as speed for regulator approval, will be a factor in the decision, as the bankrupt Oi hopes to gain access to the funds from the deal as quickly as possible to pay off its debt and expand its fibre broadband unit.
The bidding for Oi is certainly heating up, but there could yet be more players entering the fray. Earlier this month, Brazilian media was reporting that local telco Algar Telecom, alongside its partner investment fund GIC, could be looking to make a bid. Acquisition of Oi’s mobile unit would allow the regional telco to go national, though whether it has the financial might to compete with the current bidders is seeming less and less likely.