IOTL, in the 1580s' War of Portuguese Succession, the Battle of Ponta Delgada was an attempt by the french forces loyal to portuguese pretender Antonio, Prior of Crato, to estabilish a foothold on the Azore islands. The battle was a roughly equal fight, with multiple french vessels fighting off against fewer, but larger, spanish-iberian vessels. Still, Philip II's forces managed to win the battle and conquer the azores.
But what if Antonio's forces had won the battle? Perhaps by having french commander Piero Strozzi listen to his portuguese advisors and choose another battle formation rather than the line-of-battle one he chose IOTL.
Could the azores serve as a beachhead for Antonio to reconquer his country from the habsburgs?
If not, then... can Antonio estabilish some sort of Avis-Portugal-in-exile?
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I think that the subsequent English Armada OTL demonstrated the futility of Antonio's cause, at least after he'd initially lost the mainland. I don't think the prospect of him holding the Azores was tenable either. Philip couldn't allow a challenger to retain any Portuguese territory so close to home and the islands had an immense strategic importance to the Portuguese as a gathering place for the India armadas returning laden with riches from the east.

Maybe if the Spanish are defeated but Antonio is unable to follow up by retaking Portugal then he sells the islands to the French. But they'd by held as French territory, and at great cost to France I'd imagine, not as a Portuguese government in exile.
I can imagine the plausibility of an Avis dynasty in exile in the Açores, but that would probably entail a militarization of the populace and society of the archipelago to face multiple foreign threats, support from other powers, a stable source of income, even if piracy (which would kind of weaken Antonio's claim to the portuguese throne), a sailing tradition in the isles so that fielding a powerful navy is plausible, the fortification of key centers to face the (inevitable) spanish invasions to come, and maybe the development of technical skill inherent to the aforementioned topics that leads to a modrnization of the fleet, maybe smaller, more maneuvreable ships with good firepower, archipelago frigates and what-not.

On the other hand, I can also see the possibility of an exile in the colonies, a prosaic resource very common in ATLs. In this case, he would probably go to India, the most secured part of the empire at the time, and just to have a notion of the state of the empire, the Indic possessions of the Portuguese crown were constantly endangered by local rulers and foreign powers. Maybe another option would be Brazil, but the French and Dutch had their eyes on time for quite a while and would probalby take the opportunity to seize the portuguese south american possessions almost like OTL f the spanish were more distracted, so a pseudo-butterfly of such a timeline would be a completely different Brazil.

Furthermore, taking the second option into account, if Antonio and maybe some loyalists went into exile to the Indic, probably with French and English ships and supplies, he would have a tough nut to crack, facing simultaneously foreign plots, native rebellions and gubernatorial treachery. It would take a lot of time and energy to solidify his hold over such territory, and developing the means to secure it all and maybe even expnd it would be very difficult indeed, especially if we have the threat of spanish intervention and loyalisms in mind. And one must make it so that the probably-sick-of-that-game French and English wouldnt just seize the Portuguese outposts around the world and tell Antonio to f--- himself, leaving him without support, a base of operations, money and men.

Another option would be that, after the seizure of Portuguese colonies all over the world by foreign powers and native rules, Antonio would turn into a pirate with a few loyalists and some quick ships, seize some forgotten but well-positioned island, probably in the Caribbean, and turn to piracy to fight foreign interests in his now super-reduced "empire".
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