Telesp Vivo and PT-minority, a good fit for Alierta and Socrates

The readiness for dialogue of the two rivals Telephonic and Portugal Telecoms (PT), fighting for control of Brazilian Vivo began yesterday with the awaited positive news for Telephonic that the Court of Justice of the European Union’s action as illegal Lisbon gold used to veto the recent PT board, which approved the sale of Telephonic for Vivo to 7150 million (25% more than the initial offer). But as the European Court decision will not unlock an overnight operation (although not supported by action, the prime minister of Portugal, Jose Socrates, will not change the rules in days), all eyes are now fixed on possible solutions that Telefonica and PT to take in the coming days. In fact, PT would not go in to comment on the decision of the Court (he did the Government, which did not agree), and preferred, like Telefonica, look ahead. “We need to find platforms to maximize the benefits for all parties,” said Zeinal Bava, President of PT. This proactive approach is logical. The clock runs counter to all. This solution should arrive within a week: the latest offer from Telefonica to acquire 30% of Brasilcel (company that controls Vivo) expires on the 16th. Far from betting on improved third offer, one of the possible scenarios to fit the ambitions of each of the parties in this race is because PT will enable Telefónica to merge the mobile operator Vivo with its fixed line business Telesp in exchange for maintaining a minority presence in this new business group, according to analysts polled by pointing BUSINESS. This would help to appease the claims of the Portuguese Government to continue its strategic presence in Brazil, its most strategic market after the Portuguese, and at the same time, Telefónica could merge their businesses and mobile telephones, whose ultimate goal is to increase synergies in this market of great potential (to reduce the impact of falling mobile termination rates). In line with this possibility, Telefónica could limit the payment terms of the offer, which includes an acquisition by sections in your plan B (plan A is a cash payment of 7150 million). The offer provides for the purchase installments of one third in cash (EUR 2.166 million) and then purchase the remaining two thirds. In this possible scenario, Telefónica could shorten the first payment in cash, according to some market sources consulted by this newspaper. Another advantage for PT in this possibility is the dividend. While maintaining a smaller share in the group Live-Telesp, the odds of receiving a dividend for the Portuguese operator could be higher than that obtained at its current participation in Vivo. Minority’s minority, meanwhile, are still at war. Yesterday still threatened to take legal action against the Government financial liability Luso and the board of directors of PT if, finally, does not flourish through dialogue between the companies. These measures would aim to compensate the small shareholders of “economic damage” done to them by the Portuguese government’s decision, said the association. Finally, the Minister of Industry, Tourism and Trade, Miguel Sebastián, said yesterday that the Government is confident that there is a settlement between Telefonica and Portugal Telecom on the acquisition of Vivo by the Spanish operator “in the very near future