UPDATE: Spain's Telefonica Raises Bid For Vivo Stake To EUR7.15 Billion
June 29 2010 - 7:14PM
Dow Jones News
Spanish telecoms giant Telefonica SA (TEF) has raised its offer
for a stake in Brazil's Vivo Participacioes SA (VIV) to EUR7.15
billion, in a last-ditch attempt to convince shareholders of
Portugal Telecom SGPS S/A (PT) reluctant to exit the coveted
Brazilian market.
Both companies have been locked in a power struggle over Vivo,
which the two Iberian telecoms control through a 50-50 joint
venture in the investment vehicle Brasilcel, which owns 60% of the
Brazilian mobile phone company.
PT said late Tuesday that Telefonica's new offer will be
submitted to its shareholders at the general meeting called to vote
on the unsolicited bid for Vivo's stake Wednesday morning.
Both companies see Vivo as key to their future growth prospects.
Telefonica's first bid of EUR5.7 billion was swiftly rejected by
PT's board last month. The Spanish company then offered EUR6.5
billion for PT's stake.
The Spanish giant, which until recently was also the single
largest shareholder in PT, directly owns 2% in the Portuguese
company. Last week, Telefonica divested 8% of PT to foreign hedge
funds and asset management firms as part of an effort to tilt the
voting balance at PT's shareholders meeting.
The Portuguese government, in turn, reacted by asking
state-owned bank Caixa Geral de Depositos to vote against
Telefonica's bid. Caixa Geral de Depositos is one of PT's core
shareholders, along with Portuguese bank Banco Espirito Santo SA
(BES.LB).
Company websites:
http://www.telecom.pt
http://www.telefonica.com
-By Santiago Perez, Dow Jones Newswires; +34 618 528 681;
santiago.perez@dowjones.com
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