Portugal Telecom Merger Defense To Focus On Price -Report

LISBON -(Dow Jones)- Portugal Telecom is focusing it defense against Sonae' EUR10.7 billion ($12.7 billion) takeover approach on the price of the offer, the Jornal de Negocios newspaper reports in its Friday edition, without specifying its sources.

The report said Portugal Telecom Chief Financial Officer Zeinal Bava would lead the defense effort, given his good relations with the international investment community.

It said PT's plan is to guarantee at least 25% of the company's shareholders support management to fend off the bid.

The newspaper said the strategy was inspired by Marks & Spencer Group PLC's (MKS.LN) 2004 effort to block a takeover attempt, which involved steadily increasing shareholder support, forcing the bidder to keep raising the offer until it eventually gave up.

A PT spokeswoman said the company had no comment on the report.

PT has previously said Sonae's EUR9.5-a-share offer for its 1.13 billion shares significantly undervalues the company.

Newspaper Web site: http://www.negocios.pt

-By Erik T. Burns, Dow Jones Newswires; +351 21 319 1863; erik.burns@dowjones.com

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Posted to the site on 24th February 2006