Telefonica attempts to secure investment in Brazil
Date added: 12th May, 2010 at 09:05
(view all articles from May, 2010)
Categories: Economy
Telecommunications firm Telefonica made an unsolicited bid to buy stakes in Brazil's largest mobile phone company Vivo, which was rejected on Monday (May 10th).
According to Reuters, preferred shares in Vivo rose 7.6 per cent on the news to 48.94 (£18.56) reais during morning trade on Tuesday, with voting shares surging 33.3 per cent to 58 reais.
Meanwhile preferred shares in rival TIM Participacoes, which the news provider speculated could be Telefonica's next target, gained 5.7 per cent to 4.82 reais and voting shares added 7.4 per cent to 6.52 reais.
The €5.7 billion (£4.9 billion) offer comes during a period of consolidation in the country's telecommunications market as overseas firms invest in Brazil.
Reuters reported that French company Vivendi bought Brazilian traders GVT in 2009 as national demand for high-speed phone and internet services increased.
International investment in Brazil has come with hopes that growth in emerging markets could counteract financial downturns in developed economies.
Bloomberg said Portugal Telecom, which controls Vivo, saw Brazilian sales gain 4.1 per cent to €3.2 billion in 2009, while revenue from their Portuguese operations fell 1.9 per cent.
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