Tag Archives: Portugal Telecom

Portugal Telecom Denies Oi Takeover Talks

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Portugal Telecom issued a statement saying it has no plans to take control of or make an offer for the rest of Brazilian operator Oi. The Portuguese operator said that, together with Oi’s controlling shareholders, it “regularly review proposals which may enhance operational performance and governance to extract additional synergies especially in the areas of engineering, network, technology, innovation and services“.

The statement follows a report in the Portuguese daily Sol, which said that a possible merger of Portugal Telecom and Oi is being examined by the management teams of both companies. The report said that Portugal Telecom CEO Zeinal Bava is “the best positioned candidate” to lead the project.

Brazil magazine Veja reported that the Jereissati and Andrade families were in talks to sell Oi for BRL 2 billion (USD 985 million). Carlos Jereissati and Sergio Andrade would each sell a stake of 19.35 percent in Oi, the report said without naming its sources.

Portugal Telecom Completes the 25.3% Purchase of Oi

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Portugal Telecom has confirmed that the previously announced investment in Telemar Norte Leste – operating in Brazil as Oi – has been completed, and the company has acquired a direct and indirect stake of 25.28% in Telemar Norte Leste for a cash consideration of R$8.32 billion (US$5 billion).

As previously stated the corporate governance rights attributed to PT will allow the proportional consolidation of its 25.6% direct and indirect stake in Telemar Participações, which fully consolidates TNL and TMAR. This proportional consolidation will take place from 1 April 2011.

PT’s investment in Oi is structured as follows: (1) a 35% stake in AG Telecom Participações; (2) a 35% stake in LF Tel; (3) a 12.07% stake in Telemar Participações; (4) a 10.49% stake in TNL, and (5) a 9.43% stake in TMAR.

Following these transactions, PT said that it will continue to benefit from a robust balance sheet and significant financial flexibility, with a cash flow profile consistent with its attractive shareholder remuneration policy and an investment grade rating.

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Portugal Telecom closes on Oi acquisition

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Portugal Telecom has signed the definitive sale and purchase, subscription and shareholders agreements with Oi and its controlling shareholders. The announcement follows PT’s investment in and the strategic partnership with Oi, on 28 July 2010, and the extension of the validity of the memorandum of understanding, on 30 October 2010.
The key transaction terms have been maintained in accordance with the strategic nature of this investment, namely minimum direct and indirect economic stake in Oi of 22.38 percent for a cash disbursement of BRL 8.32 billion, and significant corporate governance rights to be attributed to PT, resulting in the proportional consolidation of its direct and indirect stake in TmarPart (25.6%).
PT thus gains control of 12.07 percent of Telemar Participacoes, part of Oi’s business, as well as 35 percent stakes in the AG and LF units. The deal also involves a capital increase of up to BRL 12 billion by Oi units TNL and TMAR each. The Oi transaction is expected to close by the end of March.

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Telefonica acquires 50% stake in Brasilcel

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Telefonica has notified the Spanish stock market regulator CNMV that it has acquired a 50 percent stake in Brasilcel. Owned by Portugal Telecom, Dutch company Brasilcel owns approximately 60 percent of the capital stock of Brazilian mobile operator Vivo Participacoes. The 50 percent stake acquisition follows the 28 July agreement between Telefonica and PT.

As agreed, Telefonica has made the first payment of EUR 4.5 billion. The remaining amount, up to EUR 7.5 billion, will be satisfied under a schedule of payments, including EUR 1 billion on 30 December 2010, and EUR 2 billion on 31 October 2011. However, PT can request for this last payment to be executed on 29 July 2011, and therefore the price of the acquisition and the closing payment will be reduced by approximately EUR 25 million.

As a result of this acquisition, Telefonica gains control of Vivo. In connection with the closing of the transaction, the agreements signed in 2002 between Telefonica and Portugal Telecom, in relation to their joint venture in Brazil, have been terminated. Telefonica will launch a tender offer over the voting shares of Vivo, for a price equal to 80 percent of the price paid by Telefonica to PT for each voting share of Vivo owned by Brasilcel.

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Telefonica Deal to Buy VIVO Falls Apart

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On Saturday, Telefonica pulled out of negotiations to acquire Portugal Telecoms stake in Vivo Participações (VIVO) for EUR 7.15 billion ($9.3 billion).

The deal fell through after Portugal Telecom’s board of directors failed to accept the Spanish company’s offer by the deadline.

“The deal has been extinguished,” Telefonica said.

Though PT shareholders voted two weeks ago to accept the offer, the Portuguese government used special voting rights to block the sale, citing national interests.

The European Union’s Court of Justice then ruled that the Portuguese government’s blocking of the deal was illegal.

Portugal Telecom is Portugal’s largest telecommunications operator and the Portuguese government demanded it maintain a foothold in Brazil as it did not want to lose Portugal Telecoms’s Brazilian revenue stream.

Telefonica would not comment Saturday on the possibility of legal action following the collapse of the deal.

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Telefonica Wont Extend Bid for VIVO

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­Telefonica has ruled out the possibility of extending the July 16th deadline for its EUR 7.15 billion (USD $9 billion)offer for Portugal Telecom’s stake in their Brazilian joint venture. The offer has been accepted by 74% of Portugal Telecom’s shareholders, although the Portuguese government attempted to use its “golden share” to block the deal. This was later ruled illegal by the European courts.

“This ends July 16,” Chairman Cesar Alierta told Bloomberg News. “Brasilcel is a relationship between Portugal Telecom and Telefonica and as far as I know there is no need for anybody else to interfere.”

The two phone companies jointly own Brasilcel, which controls 60 percent of Vivo Participações (VIVO) . Telefonica originally offered EUR 6.5 billion (USD $7 billion) for the Brazilian stake, but later raised it to the current EUR 7.15 billion (USD $9 billion).

Telefonica will go to a Dutch arbitration court to seek the breakup of Brasilcel if it can’t reach an agreement this week, Spanish newspaper ABC reported today, citing people close to the phone company’s board it didn’t identify. In the event that Brasilcel were broken up, Telefonica would seek to buy shares in Vivo in the open market until it reaches majority control, ABC added.

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Telefonica increases bid for VIVO to 7.15 billion Euros

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Telefonica has again increased its offer for Portugal Telecom’s stake in Brazilian operator Vivo Participações (VIVO), hours before Portugal Telecom shareholders are expected to vote on the deal.

Telefonica has now boosted its previous EUR 6.5 billion offer by 10 percent. The new consideration amounts to EUR 7.15 billion and is valid until 2 July. All the other terms and conditions of the previous offer launched on 1 June remain the same. The revamped offer will be submitted to Portugal Telecom shareholders at the general shareholders meeting on 30 June.

Telefonica had already increased its initial EUR 5.7 billion offer by 14 percent to 6.5 billion on 1 June to gain support from Portugal Telecom Shareholders. Portugal Telecoms board unanimously rejected Telefonica’s previous offers, claiming that the bids did not reflect the strategic value of the asset for Telefonica.

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