Pension funds to reject Telefonica offer

1 Oct 2008

Bloomberg reports that Chilean private pension fund managers have agreed to reject an offer from Telefonica to buy their combined 20.8% stake in fixed line former monopoly Telefonica Chile (formerly known as CTC). Quoting local newspaper El Diario Financiero, the report says that the rejection will likely be announced next week. In early September Telefonica announced a USD1 billion cash offer for the outstanding 55.1% stake in Telefonica Chile it did not already own, offering CLP1,000 (USD1.82) for each A-series share and CLP900 for each B-series share. Despite Telefonica having publicly stated that it will not sweeten its offer, analysts said the pension funds’ move might force it to dig a little deeper.

Telefonica Chile shareholders will vote at a 7 October shareholders meeting whether to modify the telecom’s bylaws in order to allow the Spanish telco to increase its stake to over 45%. Telefonica has set a 16 October deadline for shareholders to accept the offer.

Chile, Telefonica Moviles Chile (Movistar)