Zon shareholders agree to alter voting rights; is Sonaecom merger back on the table?

31 Jan 2012

Shareholders of Portuguese cableco Zon Multimedia have voted their approval of a plan to lift voting rights beyond the current 10% limit, Bloomberg reports. The outcome paves the way for existing shareholders to raise their stakes in the company, whilst reigniting speculation that it could be set to merge with rival operator Sonaecom. Banks Caixa Geral de Depositos and Banco Espirito Santo, which own 10.93% and 2% of Zon respectively, are reportedly being pressed to sell assets to raise capital ratios under Portugal’s bailout programme. State-owned Caixa is obliged to sell all non-core assets according to the plan. Another group likely to cash in on its Zon stake is Spain’s Telefonica, which holds a 5.46% stake in the cableco; in November 2011 the Spanish telco indicated that it was looking to divest non-core or underperforming assets in order to reduce debt.

The shareholder vote has prompted fresh speculation that Kento Holding, which is controlled by Isabel dos Santos, the daughter of Angola’s president, is the most likely buyer of additional Zon shares; Kento currently holds a 10% stake in the Portuguese operator. Numerous Angolan companies and investors, Bloomberg notes, have increased their stakes in prominent Portuguese companies since the cash-strapped nation became the third euro-zone country to request a bailout from the European Union (EU) and the International Monetary Fund (IMF) last year. If Kento does indeed raise its stake in Zon, it may be willing to make an approach for smaller rival Sonaecom, which, according to TeleGeography held a meagre 3.7% share of the Portuguese broadband market at end-September 2011. Sonaecom shareholder France Telecom-Orange is keen to offload its 20% stake in the struggling broadband operator, whilst a long-rumoured merger between Zon and Sonaecom would create a company capable of competing with incumbent Portugal Telecom (PT).

Portugal, Nos, Optimus (Clix)