July 22, 2020 / 7:59 PM / 13 days ago

Digital Colony's Highline do Brasil submits top bid for Oi's mobile assets

SAO PAULO (Reuters) - Highline do Brasil, a portfolio company of U.S. private equity firm Digital Colony, has presented the best offer for the mobile assets of Brazilian telecom Oi SA (OIBR4.SA) and the two parties are entering exclusive negotiations, Oi said on Wednesday.

FILE PHOTO: A man leaves the office of Brazilian telecoms company Oi SA in Rio de Janeiro, Brazil December 22, 2017. REUTERS/Ricardo Moraes

Oi did not disclose the value of the offer, but said in a securities filing the offer exceeded the minimum established by the Brazilian telecom of 15 billion reais ($2.93 billion).

Digital Colony, backed by U.S. real estate investor Thomas Barrack and Digital Bridge Holdings, is focused on investing in digital infrastructure in Canada, Latin America and Europe.

Reuters, citing two sources, had reported earlier on Wednesday that Digital Colony had submitted a bid. The sources said Digital Colony is interested in Oi’s mobile infrastructure assets, not necessarily in providing telecom services directly to consumers.

Digital Colony could seek partnerships with other telecoms players to provide them with services using its infrastructure, which could also involve further asset sales down the road, one of the sources said.

The private equity firm, which has some $20 billion in assets under management, is already talking to one such potential partner, Brazil’s fifth largest carrier, Algar Telecom, about a potential deal, they said.

Algar said in a securities filing it is constantly evaluating potential acquisitions and partnerships which may add value to its business.

Highline also delivered a binding proposal to acquire Oi’s cellular tower unit for 1.08 billion reais on Friday.

Besides Digital Colony, existing operators TIM Participacoes (TIMP3.SA), Telefonica Brasil SA (VIVT4.SA) and America Movil SAB de CV’s (AMXL.MX) Claro submitted a joint bid for Oi’s mobile assets.

Oi intends to use the asset sale proceeds to fund its growing broadband fiber unit and pay off debt as part of its effort to emerge from bankruptcy protection.

Reporting by Carolina Mandl; Additional reporting by Gram Slattery; editing by Jonathan Oatis, David Gregorio and Lincoln Feast.

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