PT Shareholders to Vote on Telefonica Offer

Shareholders of Portugal Telecom (PT) will decide tomorrow whether to accept Telefonica’s offer of acquiring half of a joint venture that holds Vivo Participacoes for about EUR6.5bn. A source close to Telefonica says it is likely that the new holders of the 8% of shares that Telefonica sold recently, worth about $800m based on market prices, will not likely be counted. “There are rumors that holders of those shares will not be allowed to vote,” the person says. A Spain-based analyst who covers Telefonica says the vote could go either way, as international investors hold about 64% of PT shares. Meanwhile, Telefonica insists that its offer is fair and does not say whether it will raise it. It already sweetened its deal early this month from an initial EUR5.7bn. Credit Suisse and UBS are advising Telefonica, while Bank of America is understood to be working in PT’s defense.