The planned merger of two of Brazil's telecoms networks may be held up after
the stock market regulator blocked the two largest shareholders from setting the
price of their network assets.
Brazil's Oi and Portugal Telecom had planned to use asset prices approved by
their largest investors to help determine the distribution of shares in the
merged company.
However, the stock market regulator ruled that this could disadvantage the
company's smaller shareholders and blocked the decision. The decision was taken
by technical staff and still needs to be formally upheld by the regulator,
although that is usually just a formality.
The smaller shareholders have been protesting against the merger, which they
claim is not being priced to their advantage. Under the terms of the deal, new
shares would be issued to pay off the debts of the majority owners, but the
smaller shareholders were not expected to benefit directly from that.
The upside would have been a much simpler shareholder structure though, as
the structures are somewhat complex at the moment.
The merger was also seen as necessary to be completed if the two companies
are to compete with their rivals, or participate in a possible break-up of
Telecom Italia's local subsidiary -- if such an event were to take place.
No comments:
Post a Comment