PT Chairman: Telefonica Voting On Offer Would Be Conflict Of Interest

Telefonica SA (TEF, TEF.MC) would be in a conflict of interest if it were allowed to vote on its own offer to buy Portugal Telecom SGPS SA's (PT, PTC.LB) indirect stake in Vivo Participacoes SA (VIV, VIVO4.BR ) at an extraordinary general meeting this month, PT Chairman Henrique Granadeiro said in an interview late Tuesday on Diario Economico's television station.

He said the decision on whether to allow Telefonica to vote at the PT shareholders' meeting, to be held on June 30, isn't up to him but to the president of the meeting.

Telefonica, which owns 10% of PT, has offered EUR6.5 billion for PT's stake in the Brazilian mobile company.

Both Telefonica and PT control Vivo through a 50-50 joint venture in the investment vehicle Brasilcel, which owns 60% of Vivo.

PT repeatedly has said the offer doesn't value Vivo appropriately, but it will allow its shareholders to vote on whether to accept Telefonica's offer.

Company websites: http://www.telecom.pt

http://www.telefonica.com

-By Jeffrey T. Lewis, contributing to Dow Jones Newswires; +34-91-395-8120; djmadrid@dowjones.com

(Santiago Perez in Madrid contributed to this article.)

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