Telecom Takeover Approved in LisbonYahoo writes…Portuguese conglomerate Sonae’s 11.1 billion euro ($14.4 billion) bid for Portugal Telecom cleared its last regulatory hurdle Friday when the country’s Stock Market Commission approved the takeover.
Sonae, which launched its bid 11 months ago through its listed subsidiary SonaeCom, is offering 9.50 euros ($12.30) per PT share and will begin purchasing stock Monday.
Analysts, however, predict that Sonae will have to raise its offer substantially to succeed in its stated aim of collecting at least 50.1 percent of its bigger rival.
The Lisbon stock market regulator’s decision, announced on is Web site, came after the market had closed.
PT shares ended up 0.7 percent at 10.20 euros ($13.20). SonaeCom leaped almost 3 percent in early trading but fell back to 5.95 euros ($7.70) for a 0.85 percent increase at the close.
The success of the bid also hinges on a general assembly of Portugal Telecom shareholders expected in early March.
PT’s statutes stipulate that no single shareholder may hold more than 10 percent of the company’s voting rights, and changing that requires a general assembly.
PT’s board has rejected the offer, saying the bid undervalues the company, and described it as hostile.
The Portuguese government holds a tiny share in PT which gives it special veto rights over strategic issues such as mergers.
However, that power was devised mostly to fend off foreign takeovers, and the government has been under pressure from the European Union to exit the private sector.
The bid won approval from Portugal’s competition authority last month.
But the watchdog said if SonaeCom’s bid is successful it would have to offload either its fixed-line or cable networks. It would also have to give up one of the two mobile licenses it would own if the deal is closed.
PT controls both Portugal’s fixed-line network as well as its main cable television network called TV Cabo.
In the domestic market, Sonae and PT have often clashed over regulatory issues. Sonae has repeatedly accused PT of using its advantage as a former monopoly to skew competition.
Sonae, controlled by Portuguese tycoon Belmiro de Azevedo, has invested heavily to build out its own fixed-line network, mainly to support Internet clients.
