Telefonica faces a tight vote over its bid to buy out Vivo

City A.M. Reporter
SPAIN’S Telefonica faces a tight vote by shareholders of Portugal Telecom over its attempt to buy out their joint venture in Brazil, after Portugal’s regulator dealt a blow to its strategy.

Portugal Telecom, or PT, shareholders are scheduled to vote in Lisbon today on the Spanish carrier’s €6.5bn bid to buy out PT’s stake in their Brazilian venture Vivo.

PT management has rejected Telefonica’s sweetened bid for Vivo – the biggest mobile phone company in Brazil, as have two major Portuguese shareholders and the Portuguese government, which has a golden share in PT.

But foreign investors who control about 65 per cent have been less vocal about their intentions and could vote either way.

Telefonica, which until recently held 10 per cent of Portugal Telecom, last week sold eight per cent in what Portuguese media interpreted as an attempt to have the votes count, as Telefonica would likely be barred from voting because of its conflict of interest.

However, Portugal’s market regulator said on Monday the stake should be considered as still belonging to Telefonica for the purposes of the vote.

The chairman of the shareholder meeting will have the last word on whether Telefonica can vote today.

The Portuguese government argues its leading telecoms operator should retain Vivo to continue its presence in Portuguese-speaking Brazil, a fast-growing telecoms and internet market. PT has few other assets abroad.