Altice purchased TVI and it may face “political setbacks”

Meo purchased TVI. Or better said, Altice purchased Media Capital to the Spanish Prisa. Patrick Drahi’s company offered 440 million euros in an operation that analysts believe will force the media market to fight back. Michel Combes (Altice’s CEO), Alain Weill (Altice Media’s CEO) and Paulo Neves (CEO and chairman in PT Portugal) presented the deal this Friday, in a press conference, in Lisbon.

“This is a new step in our adventure in Portugal, which began two years ago with the acquisition of PT”, stated Michel Combes, Altice’s CEO, in the press conference. He further added that Altice’s strategy is to “converge the telecommunications with the Media companies”.

Rosa Cullell will continue as the CEO of Media Capital, stating: “My intention is to stay in Lisbon, with my team”. Michel Combes answers: “We are extremely committed in working with her in the board of administration”.

We are very excited about this deal […] We are proud of what we achieved, of the investment we made in your country. I believe everyone will be happy with what was accomplished.

The operation must be authorized by the Portuguese and Spanish authorities and market regulators, as Meo disclosed in the preliminary announcement of the tender offer: “Acceptance of the Offer by its addressees is subject to compliance with the respective legal and regulatory requirements, including those set forth under foreign legal frameworks to which the addressees of the Offer are bound”; as for Altice, both banks and creditors also have to authorize the operation.

If the competition authorizes the sale, the purchase of Media Capital will be “disruptive” for the market, BPI analysts state. “Altice will try to find competitive advantages in terms of content and that will force competitors to get a move on”, highlights Pedro Oliveira, analyst for BPI. Artur Amaro from CaixaBI agrees: “Assuming Altice will indeed acquire Media Capital, we believe that a new dispute for contents among operators could intensify”.

Nuno Matias, from Haitong, says that both Nos and Vodafone “are able to to replicate [what Altice can get with the purchase of Media Capital] through partnerships with other media companies”. BPI is afraid that the investment effort made by Nos will have to be reinforced, which investors may perceive as negative.

In addition to the competition’s green light, BPI warns against possible “political setbacks to the acquisition”, because of the comments it made about Altice in the state of the Nation debate.

^{Note: The information presented is based on an issuance from the investment bank, meaning it is not a recommendation from ECO. Concerning investment decisions, readers should consult the bank’s complete research note and speak to their financial intermediate.}