Embratel to launch USD2.6bn bid for Net Servicos’ preferred shares

6 Aug 2010

Brazilian telecoms operator Embratel Participacoes has taken a step closer to securing control of the country’s leading cable-based fixed line telephony and broadband provider, Net Servicos de Comunicacao (Net), by offering BRL4.58 billion (USD2.61 billion) to buy out fellow holders of preferred shares in the company. Embratel is offering to buy the shares at BRL23 each, a 15% premium on yesterday’s closing share price of BRL19.99, the operator confirmed in a regulatory filing. If Embratel’s offer is approved, it will hold 93% of Net’s total capital and 80% of its common shares, which carry voting rights. However, Net would remain under the control of broadcaster Globo Comunicacao e Participacoes through a holding company co-owned with Embratel. Embratel and Globo have a pre-arranged agreement that allows control to be transferred to Embratel at any time, according to Telmex Internacional’s annual report, the company which owns 99% of the Rio de Janeiro-based company. The announcement sent Net’s share price up 13% to BRL22.63.