Sonae Group launches takeover bid for Portugal Telecom

7 February 2006

Lisbon, Portugal, 07 Feb – Portuguese group Sonae launched a takeover bid for Portugal Telecom (PT) with the condition of acquiring at least 50.01 percent of the company’s capital, Sonae said in a regulatory filing.

The bid also has the condition of restricting the power of the Portuguese state over Portugal Telecom as it currently owns a golden share in the telecommunications company, or its acceptance of a restructuring plan for the company.

In a statement sent to Portugal’s stock market regulator (CMVM), the Sonae group said it was offering 9.50 euros per Portugal Telecom share and 5,000 euros for each convertible bond.

The 9.50 euro offer values Portugal telecom at a total 10.7 billion euros.

At closing market prices Monday PT has a market capitalization of 9.23 euros, which is four time higher than the value of the Sonae group which has a market cap of 2.36 billion euros. The market value of Sonaecom, the holding company for Sonae’s telecommunications, media, software and information systems interests stands at 1.047 billion euros.

The takeover announcement drove Portugal Telecom shares up 17.62 percent overnight on the New York stock exchange, closing at US$11.75 per share.

On the Lisbon exchange PT’s shares closed down 0.24 percent at 8.18 euros.

Sonaecom controls Optimus, Novis and Clix among other telecom companies and Portugal telecom owns TMN, Telepac and TV Cabo as well as Portugal’s fixed-line communications network.

Sonaecom is part-owned by France Telecom and PT ‘s main shareholders are Spain’s Telefonica, with which it is in partnership for mobile telephony in Brazil, investment funds and the Espirito Santo financial group.

The Sonae group operates in industry, retail, management and shopping centers, telecommunications and services.(macauhub)