Brazil Telesp Celular shareholders offload to PT
Reuters, 06/13/2000 15:40
By Katherine Baldwin
SAO PAULO, June 13 (Reuters) - Portugal Telecom (LIS:PTCO) paid 1.3 billion reais ($738.9 million) on Tuesday to boost its stake in its Brazilian cellular unit as it seeks to gain a bigger chunk of the operator's fast-growing profits.
Holders of common shares in Brazilian cellular operator Telesp Celular (SAO:TSPP3) agreed to sell back 44 billion shares to the Portuguese parent in the previously announced buyback offer, or 65 percent of the common shares outstanding, Brazil's stock exchange said.
The transaction, announced in March and completed in an auction Tuesday, increases Portugal Telecom's stake in Telesp Celular to 30 percent from 19 percent. Telesp Celular's concession covers what's seen as the jewel of Brazil's cellular regions, the industrial powerhouse of Sao Paulo state.
"Having a bigger stake means they get a bigger prize for their investment," said Carlos Eduardo Sequeira, a telecommunications analyst at BBA Icatu in Sao Paulo.
Telesp Celular's clients soared 59 percent in the past 12 months.
Holders of common shares in Telesp Celular scurried to offload their stock in the buyback offer, enticed by a premium of about 30 percent and anticipating a nosedive in the share's liquidity.
Portugal Telecom in March offered to buy out 68 billion Telesp Celular common shares at a price of 30 reais per share, what was a 39 percent premium over the share price then. The common shares were down 25 percent to 21 reais in afternoon trading Tuesday.
The stock slumped as other shareholders rushed to move out of the share before liquidity dried up, traders said. Shareholders who didn't acquiesce to the offer were likely small investors, unaware of or indifferent to their holdings in the company.
While investors were willing to abandon their ordinary shares, trading in Telesp Celular's preferred shares (SAO:TLPP4) should remain strong, analysts said.
"The preferred shares are some of the most liquid shares in the cellular sector," said Carlos Firetti, a telecommunications analyst at BBV Securities.
That stock could pick up some of the slack as investors migrate out of the ordinary shares and out of Telesp (SAO:TLPP4) and Tele Sudeste Celular (NYSE:TSD) (SAO:TSEP4), two telephone companies controlled by Spain's Telefonica (MADRID:TEF).
Telefonica is in the process of swapping shares in those units for its own stock, which it plans to list in Brazil.
Telesp Celular's preferred shares fell 2 percent to 29.22 reais, tracking a decline in telecommunications stocks on the Bovespa index (INDEX:$BVSP.X), analysts said. Markets in Portugal were closed Tuesday. katherine.baldwin@reuters.com))
Copyright 2000, Reuters News Service |
