Portugal Tel board weighs new bid Tuesday

LISBON - The board of takeover target Portugal Telecom will discuss rival Sonaecom’s raised 11.8 billion euro ($15.5 billion) offer at a meeting on Tuesday, a source close to PT told Reuters.

By (Reuters)

  • Follow us on
  • google-news
  • whatsapp
  • telegram

Published: Mon 19 Feb 2007, 5:12 PM

Last updated: Sat 4 Apr 2015, 9:55 PM

PT’s board is expected to announce whether or not it accepts the new offer of 10.5 euros a share offer after the meeting. It rejected Sonaecom’s initial 9.5 euros per share, which valued the company at 10.7 billion euros, as too low and labelled the bid as ‘hostile’.

At 1012 GMT shares in PT were down 0.1 percent at 10.23 euros, while Sonaecom shares were up about 1.1 percent to 7.58 euros in average trading volume.

Traders have said a successful merger would result in high synergies for Sonaecom, the telecoms arm of Portuguese conglomerate Sonae. Sonaecom shares rose more than 17 percent on Friday.

Traders said there was little likelihood of a competing bid for PT and that Sonaecom had given up its right to further increase its offer, which some said explained the decline in PT shares.

A PT shareholder meeting is slated for March 2, and Sonaecom’s offer ends on March 9.

To succeed, Sonaecom needs to convince two-thirds of PT shareholders at the meeting to agree to lift voting limits on ownership of the company.

It will also have to buy more than 50 percent of PT shares.

A takeover would give Sonaecom control of PT’s monopoly fixed-line and cable networks. But under the conditions of the regulator’s approval of the bid, it will have to sell either PT’s fixed-line or its cable network and meet a series of other conditions.

Sonaecom would be allowed to merge its mobile unit Optimus with PT’s market-leading TMN to reach about 65 percent of Portugal’s mobile market.

Sonaecom would also gain joint control of Vivo, Latin America’s biggest mobile phone company, among other assets. Vivo, which has a book value of about 2.7 billion euros, is jointly controlled by Spain’s Telefonica and PT, which share a 63 percent stake.

Telefonica is PT’s largest shareholder with a 9.96 percent stake, followed by Banco Espirito Santo (BES) with about 8 percent.

BES has publicly rejected Sonaecom’s revised bid along with private investor Nuno Vasconcellos, who owns more than 3 percent, and investor Joe Berardo, with more than 2 percent of PT.

Sonaecom launched what is considered to be Portugal’s largest takeover bid in February last year.



More news from