LISBON -(Dow Jones)- SonaeCom is willing to accept the conditions imposed by Portugal’s antitrust regulator on its planned takeover of Portugal Telecom but says its initial EUR9.5-a-share offer is now in question, a company board member said.
SonaeCom board members were speaking at a lunch with journalists following news of the Autoridade da Concorrencia, or AdC’s conditional approval of its bid for Portugal Telecom late Wednesday.
The conditions include SonaeCom’s disposal of either its cable or fixed-line unit, as well as allowing a new operator and MVNOs in the mobile business, SonaeCom revealed in a statement late Wednesday.
The board members said three things have changed since the launch of its bid in February that compromise the offer, which valued Portugal Telecom at EUR11.1 billion.
Firstly, the dividend distributed by Portugal Telecom was EUR0.09 higher than the previous year; secondly, first-half earnings were lower than expected, and finally, the AdC conditions are stricter that the company had foreseen.
However, the board members present at the lunch were unwilling to address the price issue until the AdC’s final ruling is disclosed, which should take place in the next 10 days.
SonaeCom said the AdC’s conditions are no surprise but that the company didn’t expect them all at once.
“In a way, SonaeCom is paying for the opening of telecommunications market, which is understandable, but it will cost us,” a board member said, without giving further detail.
The main condition from the AdC is the disposal of either its cable or fixed-line unit but it has not yet made up it’s mind. “At this point, it is indifferent to us.”
SonaeCom plans to put both units up for sale and see which one fetches the higher price. The AdC will have the last word on the buyer.
Asked about whether the bid is likely to go ahead without resistance, one board member said he doesn’t believe in minority-block or counterbid scenarios since “SonaeCom’s offer is difficult to match.”
Banco Espirito Santo, the biggest domestic shareholder of Portugal Telecom, has been reported to be interested in siding with a rival bid but has denied being in the process of organizing a blocking minority in Portugal Telecom.
“We’re happy to be in the game and we don’t like to lose,” says the same source.
Source- http://www.cellular-news.com
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