Government offers Verizon USD572 million for CANTV stake; Slim starts selling minority shares

14 Feb 2007

The government of Venezuela and representatives of US-based telco Verizon Communications have initiated a memorandum of understanding under which the government will buy Verizon’s 28.5% stake in Venezuelan incumbent telco CANTV for USD572.2 million. The price is over USD100 million less than the USD676 million that Mexican telecom giants América Móvil and Telmex had previously offered for the same stake. In an announcement late on Monday the government, led by President Hugo Chávez, said it would also launch public offers on the Caracas and New York stock exchanges to gain majority control of the national fixed line operator, which includes a 100%-owned mobile subsidiary, Movilnet. Telecoms Minister Jesse Chacón also said that under publicly appointed management, CANTV will consider launching USD300 million joint projects with power utility Cadafe and state-run CVG Telecom aimed at expanding fibre-optic infrastructure to all parts of the country.

Also this week, Mexican billionaire Carlos Slim, head of Telmex and América Móvil, has reduced his family’s stake in CANTV to 4.4%, according to a filing with the US Securities and Exchange Commission (SEC). Slim’s family said in an earlier filing last year that they owned 10.9% of the telco. Slim is known to have bought at least 2.4% of CANTV via publicly traded shares held by his majority-owned real estate firm Inmobiliaria.

Venezuela, CANTV, Verizon Communications