Portugal Telecom To Bid For 58.8% Of Brazil Telesp
21/05/01 13-24G
21/05/01 13-26G
LISBON -- Portugal Telecom SGPS S/A (PT) said Monday that it will launch an all-share bid to buy the 58.8% of Brazilian cellular operator Telesp Celular Participacoes S/A (TCP) it doesn't already own.
In a statement, PT said it will offer 0.852 of its shares for each 1,000 Telesp Celular ordinary shares and 0.949 of its shares for each 1,000 Telesp preferred shares. It will also offer 2.33 PT American Depository Receipts for each Telesp ADR.
PT will bid for a total of 245.4 billion Telesp Celular preferential shares and 23.9 billion ordinary shares. About 61% of the preferential shares are in ADRs.
"The ratio of exchange for all the categories of shares corresponds to a premium of 40% over the average price of Telesp Celular's shares over the past five trading sessions," the statement said.
At 1330 GMT, Telesp Celular's preferred shares were at 15.79 reals ($1=BRR2.32) after being halted for trade. PT shares were halted earlier Monday at EUR10.85.
PT said it plans to request its shares be listed in Sao Paulo via Brazilian Depository Receipts.
The offer is contingent on approval by Brazilian and U.S. regulators, as well as PT shareholders, as the company would issue new shares to cover the acquisition.
PT said the buy would significantly reinforce the group's mobile activities. Had the companies been combined, on a pro forma basis the proposed deal would have increased earnings before interest, tax, depreciation and amortization from mobile operations to 45% of the total in the first quarter from 35%.
The transaction will also strengthen PT's position in what it sees as a key market, the statement said.
"Telesp Celular is the leading cellular operator in the state of Sao Paulo, Brazil's wealthiest state," PT's statement said. "The proposed offer will enhance PT's ability to capture the full value of Telesp Celular's leading position in this premier telecommunications market."
Prior to the 58.8% offer, Portugal Telecom had a stake of about 41.2% in Telesp Celular. If its acquisition is successful, it will control 100% of the Brazilian company.
Besides Telesp Celular, Portugal Telecom owns Global Telecom, which provides wireless services in the southern states of Parana and Santa Catarina.
In January, Portugal Telecom formed a $10 billion wireless joint venture with Telefonica Moviles SA's (TEM) three Brazilian cellular units. Combined, the five units have about 9.3 million users.
Telefonica has completed or announced tender offers for two wireless units in Brazil.
PT's statement, meanwhile, made no mention of media unit PT Multimedia SGPS S/A (E.PTM). Earlier Monday, PT said its board was meeting to discuss a possible bid for Telesp as well as a possible bid for the 31% of PT Multimedia it doesn't already own.
PT has called a news conference for 1400 GMT to provide further information about the Brazilian bid.
-By Erik T. Burns, Dow Jones Newswires; 351-21-319-1863; erik.burns@dowjones.com.
Terry Wade in Sao Paulo contributed to this story. |
