Portugal Telecom, Oi shareholders approve new merger terms
By Daniel Alvarenga
LISBON (Reuters) - Shareholders of Portugal Telecom PTC.LS and Brazil's Oi (OIBR3.SA: Cotización) on Monday approved the revised terms of a merger after a failed debt investment forced the Portuguese company to accept less favorable terms in the tie-up.
At a meeting of Portugal Telecom (PT) shareholders, some 98.25 percent voted in favor of approving the new terms of the deal, according to a company spokeswoman.
"The revision (of the deal) is not an ideal situation, but it is the better option given the circumstances that have been discovered," Paulo Varela, CEO of conglomerate Visabeira, which holds about 2 percent of PT, told reporters.
Shares of Portugal Telecom PTC.LS closed 1.26 percent higher on Monday, amid expectations that shareholders would approve the terms. They have bounced over 30 percent since bottoming out last month in the aftermath of the ill-fated debt investment.
Separately, Oi shareholders also approved the new terms in a general assembly. The company's stock touched a six-week high in Sao Paulo trading as any remaining doubts about the deal dissolved.
In July, executives and key shareholders of both companies had agreed that Portugal Telecom should take a smaller share of the company resulting from the merger with Oi, settling for 25.6 percent rather than the 38 percent stake originally agreed.
The renegotiation came after a holding company of the Espirito Santo banking family defaulted on nearly 900 million euros ($1.2 billion) it owed to the Portuguese firm.
Concerns about the risky investment led the company's CEO Henrique Granadeiro to resign in early August. Continuación...