Telefonica raises bid for Brazil cell firm
By Barry Hatton |
July 1, 2010, Thursday
|
Print Edition
Print Edition
SPAIN'S Telefonica raised its bid for Brazil's leading cell phone company Vivo to 7.15 billion euros (US$8.72 billion) hours ahead of a shareholder meeting yesterday to consider the unsolicited offer.
The Spanish company raised its offer for Portugal Telecom's stake in Vivo from 6.5 billion euros in a bid to get a firmer footing in the fast-growing Latin American market.
Telefonica SA and Portugal Telecom SGPS SA each own 50 percent of Brasilcel, a holding company which in turn owns 60 percent of Vivo. Telefonica wants to buy from PT the half of Brasilcel it does not already have.
The sweetened cash bid came just before midnight on Tuesday and was made public in a filing to Spanish securities regulators. PT shareholders are meeting to consider the deal.
The Lisbon stock exchange suspended trading in PT shares after they shot up 5.42 percent to 8.75 euros following the new offer.
Joao Pereira Leite, the head of investments at Banco Carregosa in Lisbon, noted that Telefonica's offer was three times higher than Vivo's market value a month ago.
"It's a very generous offer. It makes sense (for PT) to sell," he said.
Telefonica wants to add momentum to its expansion in Latin America, one of its main growth areas, and the Brazilian wireless market is the largest on the continent.
Brazil's economy is booming despite a shaky global recovery, whereas financial gloom in Telefonica's home territory of Spain is choking the company's growth there.
Telefonica is expected to integrate Vivo wireless operations with its Telesp fixed-line services in Brazil, saving costs and broadening its appeal to customers. Telesp and Vivo represent the largest telecom force in Brazil.
The Spanish company raised its offer for Portugal Telecom's stake in Vivo from 6.5 billion euros in a bid to get a firmer footing in the fast-growing Latin American market.
Telefonica SA and Portugal Telecom SGPS SA each own 50 percent of Brasilcel, a holding company which in turn owns 60 percent of Vivo. Telefonica wants to buy from PT the half of Brasilcel it does not already have.
The sweetened cash bid came just before midnight on Tuesday and was made public in a filing to Spanish securities regulators. PT shareholders are meeting to consider the deal.
The Lisbon stock exchange suspended trading in PT shares after they shot up 5.42 percent to 8.75 euros following the new offer.
Joao Pereira Leite, the head of investments at Banco Carregosa in Lisbon, noted that Telefonica's offer was three times higher than Vivo's market value a month ago.
"It's a very generous offer. It makes sense (for PT) to sell," he said.
Telefonica wants to add momentum to its expansion in Latin America, one of its main growth areas, and the Brazilian wireless market is the largest on the continent.
Brazil's economy is booming despite a shaky global recovery, whereas financial gloom in Telefonica's home territory of Spain is choking the company's growth there.
Telefonica is expected to integrate Vivo wireless operations with its Telesp fixed-line services in Brazil, saving costs and broadening its appeal to customers. Telesp and Vivo represent the largest telecom force in Brazil.
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