Shareholders likely to reject Telefonica Chile buyout offer

7 Oct 2008

Spanish telco Telefonica’s plan to buy 100% of the outstanding shares in Telefonica Chile may be in jeopardy after another pension fund said it would reject the offer as it stands, reports BNamericas citing local daily newspaper El Mercurio. AFP Provida became the fifth pension fund manager to say it would reject the Spanish company’s offer of CLP1,000 (USD1.69) for each series A share and CLP900 for series B shares. Other funds to have also dismissed Telefonica’s offer include Habitat, Cuprum, Capital and Planvital. The funds, which together own 21% of Telefonica Chile, have reportedly asked for CLP1,200 per series A share. The Spanish giant has insisted that it will not improve its offer.

The Telefonica Chile board has called an extraordinary shareholder’s meeting for today to vote on a motion to eliminate a company bylaw that forbids any single shareholder from owning more than 45% of the company. The shareholders have until 16 October to accept the offer. Telefonica has said it would go ahead with the buyout if the offer gains sufficient acceptance for it to achieve at least 75% ownership.

Chile, Telefonica, Telefonica Moviles Chile (Movistar)