CANTV to be under state control by 4 June; board says ADS holders get better deal

16 Apr 2007

Venezuela’s government expects to take operational control of the country’s incumbent fixed line operator CANTV on 4 June, telecoms regulator Conatel said in a statement. Under a share buyout offer launched on 9 April the state is offering VEB6,978 (USD3.25) per share on the Caracas stock exchange and USD14.85 for American Depositary Shares (ADS) on the New York stock exchange. Once the offer ends, the government expects to hold an extraordinary shareholders’ meeting to elect the new board of the company on 4 June, telecoms minister Jesse Chacón said. According to the minister, the company’s post-nationalisation priorities include continuing to expand infrastructure to provide network coverage in unserved areas, with the aim of providing fixed and mobile telephony access to all communities of more than 500 people by 2011. President Hugo Chávez announced plans to nationalise CANTV in January this year and the following month the government agreed to buy the 28.5% stake held by its controlling shareholder, US telco Verizon Communications, for USD527 million.

CANTV’s board has issued no official guidance to shareholders about whether to sell stakes to the government. However, it says the offer to shareholders on the New York bourse represents a better deal than that offered to domestic investors. In a statement, the board said the government’s ADS offer added a 3.9% premium to the market value, while in Venezuela the board said the offer price represented a discount of 34.6% on the value at which the stock closed on 6 April.

Venezuela, CANTV