Portugal Telecom is still playing coy while being courted for its stake in Vivo, stating that even Telefonica's improved bid is insufficient.
Portugal Telecom CEO Zeinal Bava yesterday told a conference that the revised offer still does not reflect the strategic value of the indirect stake for Telefonica, WSJ.com said.
Telefonica increased its bid for Portugal Telecom's 50% stake in their Brasilcel JV to €6.5 billion from €5.7 billion last week. Brasilcel owns around 60% of Vivo.
But Bava is holding out for more.
Should shareholders accept Telefonica's offer, the market anticipates that Portugal Telecom will take the proceeds and invest it in a new Brazilian operator, BusinessWeek said.
The most likely target is Oi, and this knowledge has driven Oi's shares up 32% in the past month.
While it would likely be too expensive for Portugal Telecom to acquire the whole of Oi, the proceeds from a Telefonica sale could fund the acquisition of a very substantial stake.
Siitnedif investment manager Ricardo Seixas told BusinessWeek Portugal Telecom will have to invest back in Brazil, or risk becoming “a boring utility in a mature market.”