Brazilian communications group Globo Comunicacoes e Participacoes has exercised its right to sell part of its 26% stake in Sky Brazil to majority owner DirecTV.
Globo informed DirecTV that it would exercise the Exchange Rights Agreement signed between…
Brazilian communications group Globo Comunicacoes e Participacoes has exercised its right to sell part of its 26% stake in Sky Brazil to majority owner DirecTV.
Globo informed DirecTV that it would exercise the Exchange Rights Agreement signed between the two parties in October 2004 which requires DirecTV to purchase all or a portion of at least 50% of Globo’s shares in Sky Brazil. Globo has until January 2014 to exercise its option.
The Brazil company has subsequently informed DirecTV that it wants to sell 178,830,000 of its Sky Brazil shares, representing approximately 19% of the company.
The two companies will now appoint an investment bank in order to determine the fair value of the stake. DirecTV will then pay Globo either in cash or DirecTV common stock or in a combination of the two, at its discretion.
The transaction is expected to be completed in the second half of 2010, after which the US DTH provider will own approximately 93% of Sky Brazil. Globo will own the remaining 7% although retains the option of selling this to DirecTV.