Telefonica puts deadline on Vivo offer

The world’s third-largest wireless operator Telefonica SA (TEF) said that despite being rebuffed on its latest proposal, it would stand by its offer to acquire Portugal Telecom’s (PT) 50% control in the two company’s Brasilcel N.V. joint venture in Brazil that operates under the Vivo (VIV) brand. Published reports indicate the offer is valued at more than $9 billion.
Telefonica noted that its latest offer was dismissed by PT on June 30, but that it would continue to leave the offer on the table until July 16. Reports indicated that while PT’s shareholders had approved the latest offer, the Portuguese government vetoed the deal. The European Union’s European Court of Justice has since ruled that the veto violated European Union law.
The two companies started the joint venture in 2002, with Vivo counting nearly 54 million customers at the end of the first quarter of this year.
Telefonica first made the proposed offer to buy PT’s stake in the venture in May. That offer was valued at $7.2 billion, which PT dismissed noting: “Vivo is an essential asset for PT’s strategy and the sale of its stake would be against the long-term growth prospects of Portugal Telecom.”
Telefonica indicated that it hopes PT will take another look at its latest proposal.
“Telefonica is willing to continue looking for possible solutions to take this operation to a good ending, as long as there is equal availability from Portugal Telecom to this effect, in a way in which both parties feel comfortable,” the company said in a statement.