Telefonica to fight Portuguese veto on Vivo

By : |June 30, 2010 0

PORTUGAL: The Portuguese government’s veto of Telefonica’s bid for Portugal Telecom’s share of leading Brazilian mobile group Vivo exposes PT to potential law suits, and the government will have to change its mind, a source familiar with Telefonica’s move said on Thursday.

"There are lines of action of all types being drawn up (by Telefonica)… but first let’s see what (the EU) says on July 8," the source told Reuters.

The European Court of Justice is due on July 8 to vote on the legality of the golden share.

Lisbon’s decision on Wednesday to block the sale at a shareholders meeting using its golden share steamrollered PT shareholders’ overwhelming acceptance of a sweetened $8.8 billion offer from the Spanish telecoms group, taking investors by surprise.

"Clearly (the Portuguese government) will have to change its mind because the damage that is being done to Portugal is immense, not to mention the judicial uncertainty caused, and the damage to the European Union," the source said.

"PT’s board … has been sending out (the kind of) messages (which mean) that right now they could be innundated with law suits."

Telefonica on Wednesday said it had extended the acceptance period for its Vivo offer to July 16, a move aimed at allowing for a change of heart after the July 8 decision.

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