Brazil's Embratel Plans Cable TV Tender,Corporate Restructuring
March 06 2012 - 11:00AM
Dow Jones News
Brazilian phone company Embratel Participacoes S/A (EBTP4.BR) on
Tuesday unveiled plans to start a restructuring of its operations,
which could eventually bring all of the group's operations under
one roof.
Embratel, controlled by Mexico's America Movil SAB de CV (AMX,
AMOV, AMX.MX), plans to buy up shares in cable television company
Net Servicos de Comunicacao S/A (NETC, NETC4.BR) that it doesn't
already own and will examine the "convenience" of a corporate
restructuring, according to a company statement.
Embratel would be the last major Brazilian telecommunications
group to reorganize, as the industry puts behind it the complex and
fragmented years following the 1998 privatization. Telefonica
Brasil SA (VIV, VIVT4.BR) merged its fixed and mobile operations
last year, while the Oi group is in the final stages of its own
reorganization.
Embratel said the tender offer would be for all of Net's
outstanding shares, including those listed in the U.S. and in
Spain; if successful, Embratel would proceed to take Net private,
withdrawing the shares from trading.
Embratel said it has set a maximum price of 26.04 Brazilian
reais ($14.80) a share for Net's preferred and voting shares. The
company has called for a valuation of Net's shares, and if that
price is higher than BRL26.04, Embratel may cancel the plans to
withdraw Net from trading and would instead stick with a simple
tender offer.
Embratel confirmed on Tuesday that it has taken control of GB
Empreendimentos e Participacoes, the holding company that controls
Net, after buying 5.5% of GB's voting shares for BRL6.44 million
from Globo Comunicacoes e Participacoes S/A, or Globopar.
That purchase was part of a deal struck in 2005, under which
Embratel agreed to buy control of Net once legislation was changed
to allow foreign-owned companies to own Brazilian cable TV firms.
That law was changed in 2011.
Embratel said it now controls 92.2% of Net's total capital.
-By Matthew Cowley, Dow Jones Newswires; +55 11 3544 7082;
matthew.cowley@dowjones.com
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