UPDATE: Portugal Vetoes PT Vivo Stake Sale To Telefonica
June 30 2010 - 9:17AM
Dow Jones News
The Portuguese government Wednesday vetoed a EUR7.15 billion bid
from Spain's Telefonica SA (TEF) to buy Portugal Telecom SGPS S/A's
(PT) indirect stake in Brazil's Vivo Participacioes SA (VIV)
despite the approval of PT shareholders for the transaction.
The veto, through the use of a golden share, comes after
Portuguese Prime Minister Jose Socrates said in Parliament last
week that Portugal's strategic interest was linked to the dimension
and economic scale of PT.
PT and Telefonica 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 in turn owns 60%
of the Brazilian mobile phone company.
Both companies see Vivo as key to their future growth
prospects.
The government veto also takes place just before the European
Court of Justice is expected to rule next week on the legality of
Portugal's golden share in PT, designed to prevent a hostile
takeover.
European authorities claim Portugal's ownership of such a golden
share breaches the principle of the free movement of capital. An
official from Socrates' office couldn't immediately comment on the
veto.
A Telefonica spokeswoman said 74% of PT shareholders had voted
in favor of the Spanish company's offer at an extraordinary general
meeting. She declined to comment on what the government's veto will
mean for Telefonica's strategy.
"We have to study the decision first," the spokeswoman
added.
Telefonica late Tuesday improved its offer for PT's half of
Brasilcel for the second time. The Spanish company's first bid of
EUR5.7 billion was swiftly rejected by PT's board last month. It
then raised the offer to EUR6.5 billion.
-By Jeffrey T. Lewis, contributing To Dow Jones Newswires;
djmadrid@dowjones.com; 34 91 395 8120
Telefonica Brasil (NYSE:VIV)
Historical Stock Chart
From Apr 2024 to May 2024
Telefonica Brasil (NYSE:VIV)
Historical Stock Chart
From May 2023 to May 2024