Telefonica Could Block Dividends If PT Doesn't Sell Vivo
May 26 2010 - 3:46AM
Dow Jones News
Telefonica SA (TEF) said Wednesday it could block dividends
Portugal Telecom (PT) collects from the Brazilian cellular joint
venture both companies control, ramping up pressure on PT to sell
its stake in Vivo.
In a presentation to investors, Telefonica said PT doesn't have
direct access to Vivo Participacoes SA's (VIV) cashflow and an
estimated EUR111 million PT is likely to get from Vivo this year is
subject to an agreement with Telefonica.
Portugal Telecom and Telefonica currently share control of
Brasilcel, a holding company that owns about 60% of Vivo. Brasilcel
bylaws require both companies to sign off on key aspects like
dividend repatriation and strategic moves in Brazil.
A Portugal Telecom spokesman said Telefonica was using
"blackmail" to try to take over Vivo and Telefonica should
relinquish its board seats at PT due to a "lack of loyalty" and a
conflict of interests.
Telefonica began a roadshow Wednesday to persuade Portugal
Telecom's shareholders to accept a EUR5.7 billion offer Telefonica
made earlier this month for PT's portion of Vivo.
Portugal Telecom has so far rejected the offer and Portuguese
Prime Minister Jose Socrates described the company as a strategic
asset, and Brazil as a key market.
A Telefonica spokesman also said Telefonica doesn't rule out a
hostile bid for all of Portugal Telecom, in which it already has a
10% stake, if the company doesn't agree to sell Vivo.
Earlier this month, Telefonica's Chief Financial Officer
Santiago Fernandez Valbuena said that from a strictly financial
point of view a full takeover of PT might make more sense than the
bid for Vivo, but Telefonica hadn't bid for the company out of
"respect" for Portugal and its key companies.
-By Jason Sinclair, Dow Jones Newswires, 34 913958127,
jason.sinclair@dowjones.com
Telefonica Brasil (NYSE:VIV)
Historical Stock Chart
From May 2024 to Jun 2024
Telefonica Brasil (NYSE:VIV)
Historical Stock Chart
From Jun 2023 to Jun 2024