PT Shareholder: Telefonica, PT Should Discuss Vivo Bid Further

Portugal Telecom (PT) and Telefonica SA (TEF) should discuss Telefonica's EUR5.7 billion bid for PT's stake in Brazilian cell phone operator Vivo Participacoes SA (VIV) further, one of PT's top shareholders said Friday.

Amalia Morris, director for investments at Brandes Investment Partners L.P., said in an emailed statement that the offer "could pave the way to a resolution that will be beneficial to both companies."

Brandes Investment Partners is PT's third-largest shareholder with a 7.89% stake in the Portuguese telecommunications firm.

Brandes, however, didn't support Telefonica's bid outright.

"While the current offer represents a significant premium to the market price, it does not reflect the long-term strategic and operating value of Vivo to Telefonica," Morris said.

Telefonica in its bidding campaign for PT's stake in Vivo earlier this week said it doesn't rule out a bid for PT itself. Telefonica, Spain's largest telecommunications company by market value and customers, already holds a 10% stake in PT.

Portugal Telecom and Telefonica share control of Brasilcel, a holding company that owns about 60% of Vivo.

-By Bernd Radowitz, Dow Jones Newswires, 34 913958120, djmadrid@dowjones.com;

(Christopher Bjork contributed to this article)

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