The chairman of Portugal Telecom SGPS’ shareholder assembly argued that the Monday (12 January) vote on French firm Altice’s €7.4 billion bid for Portuguese telecoms assets owned by Oi, in which PT SGPS is the largest shareholder, should not take place.
Antonio Menezes Cordeiro wrote to the board of Portugal Telecom SGPS on 6 January, arguing the vote should be cancelled because the original plan for a merger with Oi has become invalid, said Reuters.
Instead, Menezes Cordeiro argued, a new shareholder meeting should be called with just two items on the agenda: either end the Oi merger or approve the sale to Altice.
Oi has agreed to sell the Portuguese assets (effectively PT’s entire domestic fixed and mobile businesses) to the French firm but the deal requires the approval of PT SGPS shareholders. PT SGPS is the largest shareholder in Oi with a 25.6 per cent stake.
On Wednesday (7 January), the board of PT SGPS said the meeting would go ahead, and only the shareholders themselves could decide to postpone it.
On Friday (9 January), PT SGPS shares were suspended while market regulator CMVM waited for information it had requested from the company. The regulator has been trying to find out more about the Monday vote.
One significant shareholder has made its view known. Ongoing Strategy Investments holds a 10 per cent stake in PT SGPS and supports the sale of assets to Altice.
“I don’t know at this time of a better alternative than the one on the table,” Rafael Mora, vice-chairman of Ongoing told Bloomberg.
“I’m open to any other alternatives that will bring value to the company, but not those that will generate litigation,” he added.
Offloading the Portuguese assets would enable Oi to have more muscle in the consolidation of Brazil’s mobile market. It could possibly buy part of rival TIM Participacoes.
However, the sale would end the original vision behind the Oi/Portugal Telecom merger, which was to create a major international player.