2 MIN. DE LECTURA
RIO DE JANEIRO, March 26 (Reuters) - Brazil's securities watchdog late Tuesday rejected complaints from minority shareholders of telecommunications company Grupo Oi SA's related to its merger with Portugal Telecom and gave a green light to a March 27 shareholder meeting to discuss the terms of the tie-up.
The regulator decided that Oi's controlling shareholders are allowed to vote at the meeting, which is expected to approve the valuation of Portugal Telecom's assets to be used in a share offering worth 8 billion reais ($3.5 billion) by Oi.
The capital increase is a key step in the merger process but minority shareholders led by fund manager Tempo Capital have challenged it, saying their stakes would be diluted because Portugal Telecom's assets are overvalued.
Regulators said they did not yet have an opinion on the dilution claims because the matter was "complex" and was still being studied. But they said the March 27 meeting could be held since any possible conflict of interest between shareholders would not be directly related to the topics that would be discussed.
Portugal Telecom and Oi have been discussing how to tie up since Portugal Telecom bought 25 percent of Oi in 2010.
Oi's largest shareholders, most of them local groups and pension funds as well as Portugal Telecom, hope a deal would give the struggling Oi more clout to compete inside Brazil against bigger rivals such as Spain's Telefonica SA, Telecom Italia SpA's TIM Participações SA and Mexico's America Movil SAB. ($1 = 2.3 Brazilian reais) (Reporting by Luciana Bruno; Writing by Walter Brandimarte; Editing by Jeffrey Benkoe)