Telefónica Sets Sights On Vivo With US$7.3bn Offer

Spain's Telefónica has made an unsolicited bid to buy out its partner in Brasilcel, the holding company that controls Vivo, Brazil's leading mobile network operator. The offer, which is valid until June 6 2010, is valued at EUR5.7bn (US$7.3bn) and, if consummated, would give Telefónica ownership of 60% of Vivo. Portugal Telecom has rejected Telefónica's offer, saying that the disposal of Vivo would mortally wound its long-term growth strategy. However, BMI's telecoms desk has long expected Telefónica to make a move on the stake and believes that it will eventually come up with an offer that Portugal Telecom shareholders - if not the company's board - would find hard to turn down.

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