Slim cancels Net delisting after minority shareholders put spanner in works

9 Jul 2012

Embratel Participacoes, the Brazilian telecoms group controlled by Mexican billionaire Carlos Slim Helu, has cancelled plans to delist shares of its cable and broadband unit Net Servicos after minority shareholders rejected the offer price as too low. In a statement, the company said that the investors, who collectively own around 1.8% of Net’s shares and who had been offered BRL26.64 (USD13.18) per share, had asked for a higher price.

TeleGeography’s GlobalComms Database writes that in February this year, Embratel exercised its call option to take indirect control Net Servicos. In a filing to Brazil’s Securities Commission (CVM), Embratel notified Globo Comunicacao and Participacoes (Globopar) that it intended to exercise its option to acquire 5.5% of the voting capital of Net Servicos’ parent GB Empreendimentos. This was equivalent to more than 1.077 million common shares of GB, which owns 51% of the voting capital of the broadband and pay-TV provider. Globo currently holds 51% of GB, while Telmex owns the remainder. That purchase was part of a deal struck in 2005, under which Embratel agreed to buy control of Net once legislation was changed to allow foreign-owned companies to own Brazilian cable-TV companies. That law was changed in 2011.

Brazil, Net Servicos