![Oi announced a merger with Portugal Telecom in October 2013, but the deal has proved disastrous.](https://webarchive.library.unt.edu/dentonfracking/20141113192646im_/http://graphics8.nytimes.com/images/2014/11/13/business/dbpix-oi/dbpix-oi-blog480-v2.jpg)
SÃO PAULO, Brazil – The private equity funds Apax Partners and Bain Capital have made an $8.8 billion offer for the Portuguese assets of the Brazilian telecommunications operator Oi, a move that could lead to a bidding war with Altice of France.
The Apax-Bain offer of 7.075 billion euros, which was announced in a filing with Brazil’s securities regulator, is slightly higher than the €7.025 billion bid Altice made this month.
Oi announced a merger with Portugal Telecom in October 2013, but the deal, which closed in May, has proved disastrous. The companies revealed this year that Portugal Telecom had invested €900 million in RioForte, a unit of Portugal’s troubled Banco Espírito Santo. RioForte has since defaulted on the debt, blowing a hole in the merged company’s balance sheet.
Amid allegations that Portugal Telecom’s management may have knowingly concealed this investment from Oi’s management and the market, share prices plunged and Oi’s chief executive, Zeinal Bava, resigned last month.
The offers from Altice as well as the private equity firms exclude the company’s RioForte investment, debt and African assets. They also both make €800 million dependent on these assets’ future revenue and cash flow targets.
A third offer, made this weekend, takes a different approach: Isabel dos Santos, Africa’s richest woman and the daughter of the President of Angola, offered to pay €1.2 billion for Portugal Telecom SGPS, a holding company that owns the defaulted RioForte investment, a 25.6 percent stake in Oi and the right to veto asset sales.
Oi turned down the offer, but Ms. dos Santos issued a statement indicating she intended to keep negotiating.
Oi is Brazil’s largest fixed-line telephone operator, but in wireless service it ranks fourth. It did not participate in the recent auction of 4G wireless spectrum.
Oi has hired the investment bank BTG Pactual to put together an offer to buy Telecom Italia’s Brazilian subsidiary TIM, possibly in conjunction with América Móvil of Mexico and Telefónica of Spain.
But since Oi has about $18 billion in debt, it probably has to raise cash to make any offer and to avoid becoming a target itself.
TIM, which is Brazil’s third-largest wireless operator but has only a tiny presence in fixed-line telephony, has indicated it might want to acquire Oi.
With so many operators battling over market share, many analysts say consolidation is very likely in Brazil’s telecommunications sector.
An earlier version of this article misspelled the surname of Oi's former chief executive. He is Zeinal Bava, not Baiva.