World VoIP NewsTelefonica still open to bid for Portugal TelecomTelefonica still open to bid for Portugal Telecom

Telefonica still open to bid for Portugal Telecom

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Telefonica and PT court investors as battle for Vivo shapes up.
Spanish telecoms giant Telefonica is putting together a battle plan as it seeks to convince major shareholders to accept its offer for Portugal Telecom (PT’s) 50% stake in their Brazilian mobile joint venture, Vivo Participacoes. Telefonica intends to launch a roadshow designed to persuade major PT shareholders – such as US-based Brandes Funds (which owns 9% of PT) and Blackrock Inc (2.3%) – to line up behind its EUR5.7 billion (USD7.2 billion) bid for control of Vivo, Dow Jones quotes people familiar with the situation as saying. Control of the cellco is seen as pivotal to Telefonica’s efforts to unlock the latent potential of the fast-growing Brazilian communications market.

To date, PT has brushed off its erstwhile partner’s advances, with Portuguese Prime Minister Jose Socrates going further to describe Brazil as a key market and Vivo as a strategic asset. Nonetheless, Telefonica has appointed Swiss investment bank UBS AG to work alongside long-term adviser Credit Suisse Group, to convince the Portuguese otherwise. For its part, Portugal Telecom last week mounted its own roadshow in California and along the east cost of the US, as it hastily worked to reassure investors about its own business strategy in Brazil. It is also understood to have hired Bank of America-Merrill Lynch (BAC) to defend itself against the Spanish group’s unsolicited bid.

But Reuters reports that Telefonica is lobbying foreign shareholders in Portugal Telecom to back its bid to take control of their Brazilian joint venture Vivo. Today Telefonica will start meetings with a series of Portugal Telecom investors in Frankfurt, London and New York, to explain their offer for Vivo to them," one of the Reuters' sources in Madrid said.

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