Telefonica is to merge the shares of Vivo, into its fixed line subsidiary, Telesp.
In a statement, the Spanish incumbent said that Vivo’s minority shareholders would receive 1.55 shares in Telesp for each Vivo share that they hold – assuming the approval…
Telefonica is to merge the shares of Vivo, into its fixed line subsidiary, Telesp.
In a statement, the Spanish incumbent said that Vivo’s minority shareholders would receive 1.55 shares in Telesp for each Vivo share that they hold – assuming the approval of General Shareholders Meetings at both companies.
If it is approved, Telefonica will hold a 91.8% direct and indirect stake in Telesp’s ordinary shares with voting rights and 64.6% of Telesp’s preferred shares – bringing its total share capital to 73.8%.
Vivo is being advised by Lazard on the transaction, while Telesp is being advised by Banco Santander.
This follows a mixed reception to Telefonica’s attempts to buy out Vivo’s minority shareholders earlier in March after a public tender offer was carried out by SP Telecomunicacoes Participacoes, a company indirectly owned by Telefonica. The offer was arranged by Credit Suisse.
SP ended up buying some 10.63 million shares, well below the offer of 15 million Vivo shares. With each share costing R$118.97 (US$ 71.45), SP will have spent almost R$1.27bn (US$764m).
SEC filings show that as of 31 December 2010, Telefonica held 38.4% of Vivo’s common shares and 34.6% of its preferred shares.
Vivo, which boasts 60 million customers, is reportedly planning to deactivate its CDMA network in September, leaving it with GSM and 3G technology.
