Oi-Portugal Telecom merger seen set to hold
By Daniel Alvarenga
LISBON Jan 19 (Reuters) - Opposition to Brazilian group Oi's plans to sell off Portugal's former national telecoms operator, PT Portugal, is not expected to result in the business being returned to its former owner, Portugal Telecom SGPS, even if the immediate sale is blocked this week, analysts and lawyers said.
The sale to Franco-Israeli billionaire Patrick Drahi's Altice for 7.4 billion euros ($8.6 billion) needs the approval of PT SGPS's shareholders, but its shares slumped 10 percent to record lows on Monday, extending a slide in the price since the vote was postponed a week ago until Jan. 22.
The vote was postponed after opponents of the sale said it would defeat the objective of last year's merger between Oi and PT SGPS, which left PT SGPS holding a 25.6 percent stake in an enlarged Oi bestriding the Portuguese-speaking world.
But lawyers, analysts and the two companies have all said that trying to rescind the merger would be too costly and trigger years of litigation.
PT SGPS also said in a regulatory filing last week that even if the Altice sale is blocked on Thursday that would not preclude Oi selling the Portuguese business in the future, as the power of veto is a temporary one which will end once the shareholding structure of the merged entity is complete.
It also said that the rejecton of the sale to Altice will deprive Oi of the chance of taking part in the consolidation of Brazil's telecoms market.
PT SGPS's slide on Monday also followed a 7.7 percent drop in Oi's share price on Friday due to uncertainty over the outcome of Thursday's vote.
Both The Portugal Telecom workers' union and the chairman of PT SGPS's shareholder assembly have proposed that the meeting votes on whether to try and revoke the merger, despite the difficulties of doing so. Continuación...