After a series of antitrust challenges, Colombia’s competition watchdog has given the go-ahead for Spain’s Telefonica to bid on a controlling stake in state-owned telecommunications company Empresa de Telecomunicaciones de Bogotá (ETB).
The decision on…
After a series of antitrust challenges, Colombia’s competition watchdog has given the go-ahead for Spain’s Telefonica to bid on a controlling stake in state-owned telecommunications company Empresa de Telecomunicaciones de Bogotá (ETB).
The decision on whether Telefónica could bid on the circa 36.6% stake was due to take place on October 16, 2009 but was then postponed to June 30 and finally pushed back to July 26.
However, the regulator ruled earlier than expected, saying that it would not stand in the way of a possible merger, should Telefonica win the auction for the state-owned asset on September 15. New shares representing a 36.6% stake in ETB are expected to be sold off through the sale, with the winner being the bidder with the highest price per share offer.
So far Teléfonos de México and Millicom have thrown their hats into the ring, but new bidders might also come to the auction in the following months.
The antitrust agency said in a statement there are indeed “high concentrations of some of the markets related to telecommunication services,” though the merger wouldn’t imply a “significant restriction to competition.”
After the auction, Bogotá city council, which currently controls ETB, will change its current shares into non-voting shares.
The new partner will then commit to hold a tender offer to buy minority shareholders’ stakes at the same price. In the case that all minority shareholders decide to leave the company, the partner would end up with a stake close to 49%, but with a majority of voting shares.
