Telefonica puts the pressure on PT
Spanish incumbent Telefonica continues its efforts to pursued Portugal Telecom to let it acquire its stake in their joint Brazilian mobile venture, Vivo Participacoes.
Earlier this month, Telefonica made a US$5.7bn offer to the Portuguese telco to…
Spanish incumbent Telefonica continues its efforts to pursued Portugal Telecom to let it acquire its stake in their joint Brazilian mobile venture, Vivo Participacoes.
Earlier this month, Telefonica made a US$5.7bn offer to the Portuguese telco to acquire its equal stake in the Brazilian telco, but the offer was rejected by PT. Telefonica is now aiming to persuade PT investors to back the proposed bid. Telefonica and PT currently share control of the holding company Brasilcel, which controls 60% of Vivo.
Telefonica has today said that it could block dividends that PT gets from Vivo, as, according to Telefonica, Telefonica is the one to have direct access to Vivo’s cashflow and the estimated E111m dividends PT is due to get from Vivo this year is still subject to agreement with Telefonica. Telefonica also holds a 10% stake in PT, so it could put pressure on shareholders this way.
PT refused to sell out, saying that Vivo was a core part of the telco and its future plans.
Telefonica is believed to have mandated UBS and Credit Suisse to advise it on the proposed stake acquisition.
PT is believed to be working with Bank of America Merrill Lynch.
