Telefónica will vote to change PT bylaw

23 Feb 2007

Telefónica of Spain has said it plans to vote in favour of a change which would remove the 10% voting rights limit at Portugal Telecom (PT). The move by the Spanish telco, which is PT’s largest shareholder with a 10% interest, will be good news for Sonaecom, which has lodged a EUR10.50 per share takeover bid for PT. Sonaecom needs the voting limit to be lifted in order to take control of PT. Dow Jones reports that Telefónica may have its eye on PT’s 50% stake in Brazilian mobile operator Vivo; Sonaecom says it will sell the stake if it succeeds with the bid for its larger rival.

PT has advised shareholders to reject Sonaecom’s offer on the grounds that it undervalues the company. Several PT shareholders, including Banco Espirito Santo and private investors Nuno Vasconcellos and Joe Berrardo, have already said they will not be accepting Sonaecom’s offer. US-based Brandes Investment Partners, which owns around 7.36% of PT, announced yesterday that it too will be turning down the offer. ‘Brandes believes that EUR10.50 per share is significantly below the fair value of Portugal Telecom,’ it said in a statement. Sonaecom needs to acquire at least 50.01% of PT’s shares for its bid to be successful.

Portugal, Optimus (Clix), Telefonica