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Material Fact

Oi S.A.
Corporate Taxpayers’ Registry (CNPJ/MF) No. 76.535.764/0001-43
Board of Trade (NIRE) No. 33.3.0029520-8
Publicly-Held Company

Conclusion of an Exclusivity Agreement with Altice S.A. Targeting the Sale of PT Portugal Assets

Oi S.A. ("Oi," Bovespa: OIBR3, OIBR4; NYSE: OIBR and OIBR.C), in accordance with article 157, paragraph 4 of Law No. 6,404/76 (the "Brazilian Corporation Law") and the Brazilian Securities and Exchange Commission (Comissão de Valores Mobiliários - CVM) Instruction No. 358/02, informs its shareholders and the market that, after receiving proposals for the purchase of assets of PT Portugal, SGPS, S.A. ("PT Portugal") in early November, Oi has continued talks with the proponents (Altice S.A. ("Altice"), and Apax Partners LLP and Bain Capital LLP ("Apax/Bain"), which submitted a joint offer), with the objective of improving the initial offers.
On Friday November 28th, 2014, Oi’s management was authorized by its Board of Directors to evaluate the firm offers. Oi’s management was tasked with selecting according to its judgment the best offer and entering into an exclusivity agreement with its proponent. The selected offer will be further negotiated and a final offer will be submitted for corporate approvals of Oi and Portugal Telecom, SGPS, S.A., as required for the potential sale of PT Portugal.

For the above reason, Oi entered into an exclusivity agreement with Altice, starting this day and valid for 90 days. The objective of this agreement is to allow: (i) Oi and Altice to negotiate and agree on the final terms of the sale of PT Portugal, and (ii) Oi to obtain the necessary corporate approvals to finalize the sale of PT Portugal.
Altice’s proposal sets the enterprise value of the assets at 7.4 billion Euros, excluding cash and debt. It includes an earn-out of 500 million Euros related to PT Portugal’s generation of future revenues. The assets of PT Portugal that Altice proposes to acquire do not include PT Portugal’s investments in Africatel GmbH & Co. KG and Timor Telecom S.A., the indebtedness of PT Portugal and the investments in Rio Forte Investments S.A. (which are subject of an exchange with Portugal Telecom, SGPS S.A. that is subject to CVM approval).

If final agreements are entered into for the sale of PT Portugal, the closing will be subject to, among other conditions, the necessary approvals by the antitrust agencies, according to applicable law.

Oi will maintain its shareholders and the market informed of any material events related to this subject.

Rio de Janeiro, November 30, 2014.

Bayard de Paoli Gontijo
Chief Executive Officer, Chief Financial Officer and Investor Relations Officer
Oi S.A.

To see the PDF version of the Material Fact, click here.

(¹) This translation is still subject to the auditors review

(¹) This translation is still subject to the auditors review