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Will Apax Spoils Altice's Party

05 November 2014 by lberuti

ALTICE (Altice SA) provided the market with a bit of action during an otherwise fairly lacklustre day in credit compared with equity. Indeed Apax reportedly decided to enter the fray regarding Oi SA’s assets in Portugal. That means that Portel might not be bagged by Altice, which offered €6.2bln and two €0.4bln performance driven earn-outs for the company. Accordingly, investors moved ALTICE’s 5 year risk premium 25bps tighter in early trading. But for Apax and its co bidders (CVC and Bain Capital) to succeed, they would have to overbid ALTICE, as it is not obvious on which grounds the Portuguese government (which in fact does not hold a golden share) would favour a PE consortium. During the rest of the day, people were left to ponder the pros and cons on both solutions (ALTICE will argue they will invest and save jobs in Potugal, while Apax et al will benefit from a significantly faster regulatory process), and the ALTICE’s 5 year CDS eventually closed 12bps tighter at 450bps.