PT: Portugal Government Golden Share Won't Be Used To Veto Vivo Bid
June 09 2010 - 6:17AM
Dow Jones News
The golden share Portugal's government holds in Portugal Telecom
SA (PT, PTC.LB) won't be used to block Telefonica's bid for the
company's stake in Brazil's Vivo Participacoes SA (VIV, VIVO4.BR),
PT said.
"This is not a golden share matter," Portugal Telecom's Chief
Executive Zeinal Bava said late Tuesday in a presentation to
investors.
The Portuguese government holds "golden share" voting rights
that could give it authority to block the deal, but the European
Commission has long insisted the golden share breaches the EU's
single-market rules.
The Spanish telecommunications company last week raised its bid
to EUR6.5 billion for PT's half of the two companies' joint
venture, Brasilcel, a holding company that controls about 60% of
Vivo.
Bava added in the presentation that the sweetened bid still
didn't represent the "strategic value" of Vivo and the growth
potential of the Brazilian telecommunications market.
Vivo is considered strategic by both Telefonica and PT, which
face stagnant revenues in mature European markets, positioning
Brazil as their main growth platform.
Bava also said "no consideration" should be given to
Telefonica's threats last month of blocking dividends PT reaps from
the joint venture if PT doesn't sell its stake in Vivo.
The Portuguese company has called a shareholders meeting on June
30 to allow its shareholders to vote whether the company should
accept or reject Telefonica's offer.
PT said that if it sold its Vivo stake it would use the proceeds
for "future investments, financing capital expenditure, repayment
of existing indebtedness, repurchase of shares and distribution to
shareholders."
Company Web site: http://www.portugaltelecom.pt
-By Jason Sinclair, Dow Jones Newswires; +34-91-395 8127;
jason.sinclair@dowjones.com
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