Telefónica captures Vivo in US$6.11 billion

On 09.29.10, In Mobile, By Editor

Telef³nica has acquired 50% stake in Brasilcel, owned by Portugal Telecom. As part of possession, Telef³nica has gained control of Vivo, which is almost 60% owned by Brasilcel.

As per the agreement with Portugal Telecom, Telef³nica paid the first installment of US$6.11 billion for the 50% stake acquisition. The remaining amount, up to US$10.18 billion, will be made under a schedule of payments, including US$1.35 billion on December 30 2010 and US$2.71 billion on October 31 2011.

Portugal Telecom can ask for the last payment to be paid on July 29 2011. Telef³nica will reveal a tender offer over the voting shares of Vivo, for a price equal to 80% of the price paid by Telef³nica to Portugal Telecom for each voting share of Vivo owned by Brasilcel.

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Portugal Telecom might accept Telefonica offer if bid rises by $7b

On 05.28.10, In Mobile, By Editor

www.WirelessFederation.com/news: Portugal telecom has signaled that it might accept more than the 5.7 billion euros ($6.9 billion) on offer, thus bringing Telefonica SA an inch closer to clinching the purchase of the Portuguese company’s stake in their Brazilian joint venture. Earlier the company had described the bid as low and opportunistic and before that it called its stake in Vivo Participacoes SA, Brazil’s largest wireless operator, strategic, suggesting a sale wouldn’t be considered.

Telefonica Chairman Cesar Alierta has been trying to merge Vivo with Telecomunicacoes de Sao Paulo SA, or Telesp, the Spanish company’s fixed-line unit in Brazil and for this purpose; it has been trying to gain control of it since at least 2006. Telefonica even threatened to curb Portugal Telecom’s ability to pay dividends, seeking to force it to the negotiating table.

According to Chief Executive Officer Zeinal Bava yesterday, the current valuation Telefonica is putting on the Vivo asset is low, and it think it’s opportunistic, clearly taking advantage of the fact that southern Europe is having one of its worst crisis for the last three decades. However, even if Telefonica raise the price, taking over Vivo will be an uphill task. Telefonica is facing rivals in the form of Vivendi SA and America Movil, controlled by Mexican billionaire Carlos Slim, in Brazil, where it is seeking growth as demand at home cools.

Depending upon the performance by Vivo in 2009, Brasilcel is due to pay a dividend of €111m each to Telefonica and Portugal Telecom this year. Vivo had 30 percent of Brazil’s 179 million wireless subscriptions at the end of March and Vivo has driven revenue growth for Portugal Telecom as growth in Europe slows and competition increases at home.
In case the offer fails Portugal Telecom’s ability to secure Vivo dividend payments via Brasilcel might be blocked by Telefonica and this move has been called attempted blackmail by Portugal telecom.

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Portugal Telecom hails Telefonica offer for Vivo as insufficient

On 05.27.10, In Mobile, By Editor

www.WirelessFederation.com/news: Portugal Telecom has announced that 5.7 billion- euro ($7 billion) offered by Telefonica for its stake in their Brazilian joint venture is clearly insufficient. Earlier, the Portuguese company had described its holding in Vivo Participacoes SA, Brazil’s largest wireless operator as strategic and a fundamental growth pillar.

Spanish company’s offer for the stake was rejected by its board on May10 but the latest comment by the SGPS SA Chief Executive Officer Zeinal Bava suggest that the Lisbon-based company may be holding out for a better price.
Telefonica Chairman Cesar Alierta has been trying to merge Vivo with Telecomunicacoes de Sao Paulo SA, or Telesp, the Spanish company’s fixed-line unit in Brazil and for this purpose, it has been trying to gain control of it since at least 2006. Telefonica even threatened to curb Portugal Telecom’s ability to pay dividends, seeking to force it to the negotiating table.

Analysts also feel that Telefonica should raise its offer to 7.5 billion euros. Telefonica and Portugal Telecom jointly own Brasilcel, a holding company with a controlling stake in Vivo. In case the offer fails, Portugal Telecom’s ability to secure Vivo dividend payments via Brasilcel might be blocked by Telefonica.

Depending upon the performance by Vivo in 2009, Brasilcel is due to pay a dividend of €111m each to Telefonica and Portugal Telecom this year. Vivo had 30 percent of Brazil’s 179 million wireless subscriptions at the end of March and Vivo has driven revenue growth for Portugal Telecom as growth in Europe slows and competition increases at home.

Telefonica Brazilian fixed-line phone business, Telesp is also underperforming amid increased competition and the telco wants to improve its position by merging Vivo and Telesp so that it can secure €2.8bn of cost savings. Due to Portugal Telecom’s skepticism about the merger, Telefonica had to make an offer to buy the Portuguese company out of Vivo.

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Telefonica to indulge in hostile bidding for Portugal Telecom

On 05.26.10, In Mobile, By Editor

www.WirelessFederation.com/news: If Spanish telecom company, Telefonica fails to persuade the Portugal Telecom to sell out its Brazilian mobile phone joint venture, it is ready to engage into hostile takeover bid of the Portuguese company. Pressure has also been build up by Telefonica finance director Santiago Fernandez Valbuena on Portugal Telecom’s shareholders by announcing that it might block the Portuguese company’s access to dividends from the joint venture.

Telefonica is Portugal Telecom’s largest shareholder, with a 10 per cent stake and the two companies are said to be entangled by an unhappy marriage in Brazil with Telefonica looking for exclusive control of Brazil’s largest mobile operator Vivo.

An investor roadshow in Europe and the US will be started by Valbuena with a hope that some Portugal Telecom shareholders will back Telefonica €5.7bn ($7bn) offer to buy the Portuguese company out of Vivo, their joint venture. He also insisted that Telefonica would not raise its offer.

Telefonica Brazilian fixed-line phone business, Telesp is also underperforming amid increased competition and the telco wants to improve its position by merging Vivo and Telesp so that it can secure €2.8bn of cost savings. Due to Portugal Telecom’s skepticism about the merger, Telefonica had to make an offer to buy the Portuguese company out of Vivo.

Two Portugal Telecom shareholders have backed the board’s rejection of the €5.7bn offer, but Valbuena claimed other investors were interested. Telefonica and Portugal Telecom jointly own Brasilcel, a holding company with a controlling stake in Vivo. In case the offer fails, Portugal Telecom’s ability to secure Vivo dividend payments via Brasilcel might be blocked by Telefonica.

Depending upon the performance by Vivo in 2009, Brasilcel is due to pay a dividend of €111m each to Telefonica and Portugal Telecom this year. According to Valbuena, it would be crazy for Telefonica to pursue a takeover of Telecom Italia if the Spanish group’s offer to buy Portugal Telecom out of Vivo fails.

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Portugal Telecom rejects Telefonica offer to buy Vivo

On 05.11.10, In Mobile, By Editor

www.WirelessFederation.com/news: Unsolicited, binding and unconditional offer has been received by Portugal Telecom from Telefonica to acquire PT’s 50 percent stake in Brasilcel, the holding company of Vivo which is a joint venture between Portugal Telecom and Telefonica.

EUR 5.7 billion has been offered by Telefonica for PT’s 50 stake in Brazilian mobile operator Vivo and the last date for the offer is June 6. On May10, Portugal telecom had a board meeting to discuss the offer and collectively rejected it.

According to Portugal Telecom, Vivo is core to PT’s strategy and the sale of its stake would be against the long term growth prospects of PT.

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Telefónica confident of seizing control at Vivo

On 02.08.07, In Mobile, By Editor

Telegeography writes…Telef³nica of Spain is reported to be ‘increasingly confident’ of acquiring exclusive control of Brazil’s largest mobile operator Vivo Participa§µes (formerly Brasilcel), writes UK newspaper the Financial Times. Vivo is currently controlled by the Spanish firm and Portugal Telecom (PT), which between them hold a 63% stake in the mobile operator. However, PT is fighting a hostile takeover bid by Sonaecom, a smaller Portuguese telecoms company, and people close to the situation suggest that Sonaecom would be willing to sell PT’s Vivo stake to Telef³nica if its takeover bid is successful. Moreover, PT itself is thought to be willing to offload its Brazilian asset even if it convinces its shareholders to reject Sonaecom’s advances. Either way, Telef³nica is looking well placed to secure overall control. Paulo Azevedo, chief executive of Sonaecom, said Vivo’s recent performance had been ‘dreadful’, and blamed it partly on the joint ownership arrangement.

 

 

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