Sonaecom not deterred by conditions

29 Sep 2006

Sonaecom says it would be willing to agree to conditions imposed by regulators on its proposed takeover of Portugal Telecom. The firm claims, however, that the requirement that it spin off either PT’s fixed line unit or its own cable TV business may force a rethink on the price per share it offered when the bid was launched. Other factors, including PT’s disappointing first half earnings, will also be factored in. Sonaecom had set a price of EUR9.50 per share, valuing PT at EUR11.1 billion, but Dow Jones reports that this may well be lowered given the conditions it will have to meet in order for the deal to be given the green light by the country’s competition watchdog AdC. This may well leave PT shareholders unimpressed. Sonaecom says it plans to put both the fixed line unit and the cable unit up for sale to see which fetches the highest price; the AdC will then be left to decide whether the buyer will be allowed to proceed on competition grounds.

Portugal, Optimus (Clix)