Telefonica of Spain last Saturday dropped its bid for Portugal Telecom (PT’s) stake in their Brazilian mobile joint venture Vivo Participacoes, declining an application for more time to consider the offer from its Portuguese partner. Reuters reports the latest development now sets the stage for a legal battle over Vivo’s future. Despite PT’s request for more time to finalise the deal, the Spanish giant has clearly lost patience with its partner. Last month PT shareholders voted overwhelmingly in favour of the EUR7.15 billion bid put forward by Telefonica, only to see the deal scuppered by the government in Lisbon which vetoed it by using its controversial ‘golden share’.
Telefonica said in a terse statement: ‘Telefonica announces that after Portugal Telecom’s board did not accept the offer within the agreed time the offer has been dropped.’ Analysts speculate that Telefonica may now look to acquire free-floating shares in Vivo on the Brazilian stock markets, although it will first have to seek legal arbitration to dissolve Brasilcel, the holding company through which Telefonica and PT own 60% of Vivo.