Portugal Telecom says standalone value 12.7 eur/share - UPDATESharewatch writes…Portugal Telecom SGPS said it calculates its standalone value at 12.7 eur per share based on the methodology used by Sonaecom SGPS in its 9.5 eur per share takeover offer for its larger rival.
In a statement released in conjunction with a news conference, PT reiterated that SonaeCom’s 13.9 bln eur bid for PT and its PT Multimedia cable network unit does not offer PT’s shareholders fair value and does not give a control premium.
After PT’s board analysed Sonaecom’s bid prospectus this week, they still think that shareholders should reject the offer, the target company said.
The announcement comes ahead of the expected approval by stock market regulator CMVM of Sonaecom’s prospectus, 11 months after the offer was unveiled.
PT said Sonecom’s offer implies no value for PT’s Brazilian mobile affiliate Vivo or for PT’s other international operations.
“The strong stock-market performance of Vivo demonstrates shareholders trust after the implementation of an extensive restructure plan,” the statement said.
Sonaecom’s strategy is unclear regarding commitments to the company’s pension fund and does not show signs of having any agreement with the government on this topic, PT said.
PT’s strategy for shareholder creation, announced in August “implies returning about half of Sonaecoms Offer value, equivalent to 4.8 eur per PT share, to shareholders over the period 2006-2008, including an annual dividend yield of 7.7 pct, while allowing shareholders to retain 100 pct ownership of the significant value creation opportunity available in PT,” the company said.
The strategy envisages the allocation of 3.5 bln eur to cash remuneration of shareholders in 2006-2008 and the distribution of 1.8 bln eur worth of PT shares to PT shareholders.
PT said it is on track to achieve it 2006 full year adjusted EBITDA targets of a flat performance in the fixed line business versus normalised 2005 figures, a 2-3 pct drop in the mobile phone division and a 5-10 pct improvement at PTM.
“Sonaecom would be a huge beneficiary of an unprecedented market concentration which by Sonaecoms own admission creates huge synergy value that is intended to be fully transferred only to its shareholders,” the statement alleged.
The board of PT believes Sonaecoms value upside is higher than the “understated” 2.0 bln eur of synergies initially indicated in the offer unveiled in February, it added.
“PT shareholders are not getting any synergy value benefit as Sonaecom is refusing to pay any of the synergies allowed by the Competition Authoritys approval,” the company said.
Sonaecom’s share price has increased by about 65 pct since the offer’s announcement, PT noted, asking whether the rise indicates a “value transfer”.
