** Portugal Telecom gains 5.5 percent after its Brazilian merger partner Oi says it will seek to win control of a larger local rival.
** GoBulling brokers' trader Paulo Rosa says acquiring Telecom Italia's unit TIM would "increase valuation potential of the group that includes PT".
** Says PT stock has "umbilical connection with Oi", which rose over 7 percent on Tuesday before the announcement.
** Oi said late on Tuesday it hired investment bank BTG Pactual to advise on a plan to win control of Telecom Italia's Brazilian unit TIM .
** PT shares are recovering from all-time lows hit earlier this month in the aftermath of a disadvantageous change in terms of its merger with Oi due to bad debt contracted by PT from Portugal's Espirito Santo Group. (Reuters messaging rm://firstname.lastname@example.org)