Battle for control of Embratel rumbles on

26 Mar 2004

A consortium comprising fixed line operators Brasil Telecom, Telemar and Telesp has stepped up its efforts to persuade WorldCom (MCI) to consider its USD550 million cash bid for the telco’s stake in Brazilian wireline operator Embratel Participacoes. MCI signed a ‘definitive agreement’ on 15 March to sell its 19.26% stake and 51.79% voting shares in Embratel to Mexico’s dominant telecoms carrier Telmex for USD360 million. MCI said it chose the lower offer because the bid by the consortium – known as Calais Participacoes – posed significant regulatory risks. Yesterday the consortium sent a letter to MCI and the judge overseeing the bankrupt group’s restructuring, claiming that its offer was financially superior to Telemex’s, whilst adding that a deal with the Mexican telco would face the same number of regulatory hurdles as an agreement with Calais Participacoes.

Brazil, Brasil Telecom (BrT), Oi, Telefonos de Mexico (Telmex), Telesp Celular, Telesp Celular Participaçoes