Brazil's Stocks Up 1.6% On Telesp Celular Stock Swap Plan
Dow Jones Newswires
May 21, 2001
SAO PAULO -- Brazilian shares are moving higher early Monday after Portugal Telecom announced plans to buy stock it doesn't already own in Sao Paulo-state wireless company Telesp Celular via a share swap.
At 1410 GMT, the main Sao Paulo index was up 1.6% at 15,128 points on volume of 61.9 million reals ($1=BBR2.332).
"The market is moving on the Telesp Celular offer," said a Sao Paulo-based trader. "The market is busy figuring out how to reweight its positions on the expectation that PT will be successful in its offer and delist the subsidiary," he added.
Telesp Celular is one of the market's top-10 liquid stocks, with a weighting of more than 4% on the index. Also, it's the bellwether of wireless stocks.
The company's preferred shares were 18% higher at BRR18.60. Portugal Telecom wants to gain control of 58.8% of Telesp Celular's shares via a swap of its stock.
The telecoms sector gained ground on the Portugal Telecom announcement, with Tele Leste Celular up 6% at BRR195 on expectations that parent Telefonica Moviles will hold a tender offer for the Brazilian wireless play.
Elsewhere, Tele Centro Oeste Celular was 7% higher at BRR7.17. The company has been at the heart of takeover speculation for some seven months, with Portugal Telecom seen as the likely candidate to buy the group that operates in six central states and has a unit in Brazil's five-state Amazon region.
Also, Tele Celular Sul, which is expected to be eventually the subject of a tender offer by parent Telecom Italia Mobile, was up 4.9% at BRR5.09.
Elsewhere, Telemar, Brazil's biggest telecoms group, was 0.8% lower at BRR38.20, while Brasil Telecom, a company that has been dogged by shareholder infighting, was 2.1% higher at BRR19.40. The market is speculating that some form of stake acquisition is in order.
Brasil Telecom's two main shareholders - Telecom Italia and local private equity fund Opportunity - are trying to control the fixed line play, but the situation has become untenable, with the shareholders going to the courts to win their board battles. The market believes that one of the shareholders will ultimately have to pull out.
Meanwhile, long-distance carrier Embratel was 4% better at BRR20.80.
Early gains, however, were later being shed as investors continued to digest an energy rationing plan unveiled by the government Friday that calls for consumers, industry and commerce to cut their consumption of electricity by some 20%.
Uncertainty about how the electricity rationing plan will impact power generation and distribution plays hurt the utilities sector.
Power heavyweight Eletrobras was off 5.5% at BRR27.70, while Rio de Janeiro distributor was 1.4% lower at BRR132.10. Meanwhile, Eletropaulo, which serves the wealthy state of Sao Paulo, was 3.5% weaker at BRR53.00.
Meanwhile, oil giant Petrobras was 0.1% higher at BRR58.05.
-By Anthony Dovkants, Dow Jones Newswires;55-11-3813-1988; anthony.dovkants@dowjones.com |
