Telefonica Raises Offer for Portugal Telecom's Brazilian Assets
Published on: 2nd Jun 2010
Note -- this news article is more than a year old.
Portugal Telecom has confirmed that Telefonica has raised its offer for PT's share in their Brazilian joint venture, Vivo Participacoes from EUR5.7 billion (USD7 billion) to EUR6.5 billion (USD8 billion). Telefonica is also offering two alternatives, one for the immediate sale of its entire stake and another to be executed at PT's sole discretion during a three year period.
Telefonica announced a cash offer for Portugal Telecom's 50% stake of Brasilcel - the holding company in which their joint venture interests in Vivo are held last month. The offer was however instantly rejected by Portugal Telecom.
Should PT accept the revised offer, Telefónica grants PT a call option, to be exercised by PT or by a third party indicated by PT over PT's shares held by Telefónica. The Call Option can be exercised along the same time period of and concurrently with the Offer at a price equivalent to the weighted average price of PT shares on the Euronext Lisbon for a certain period of time following the date hereof.
The Offer expires on June 30th, 2010. Nevertheless, Telefónica may extend this period should PT's Board of Directors submit the Offer to a Shareholders' Meeting.
The Board of Directors met today and considered the Offer does not reflect the strategic value of this asset for Telefónica and resolved to immediately request a Shareholders' Meeting so that PT's Shareholders may come to a decision on the Offer. In addition, the Board of Directors appointed the Chairman, the Chief Executive Officer and the Chief Financial Officer to discuss the Offer with Telefónica, until the aforementioned Shareholders' Meeting takes place.