Telefonica’s CFO has called on rival Portugal Telecom to let its shareholders vote on an offer to take-over Brazilian carrier Vivo.
Santiago Fernandez Valbuena said the shareholders should have their say on a €5.7 billion offer Telefonica made on Tuesday, during a conference call to discuss the Spanish incumbent’s Q110 results yesterday.
Valbuena said Portugal Telecom’s rejection of the offer raised concerns about the way the telco was being managed, and cast a shadow over its reputation, WSJ.com reports.
Telefonica’s bid totalled €6.3 billion, comprising the €5.7 billion it offered for Portugal Telecom’s 50% stake in Brasilcel - which owns around 60% of Vivo - and a further €600 million for outstanding Vivo shares.
Combining Vivo’s mobile business with its Brazilian fixed-line business would help Telefonica achieve synergies worth €2.8 billion, WSJ.com said.
Strong revenue growth in Telefonica’s Latin American businesses helped the firm grow net profit 2% year-on-year to €1.65 billion during Q110.
Revenues from the market hit €1.57 billion during the quarter – outshining Europe’s €583 million -, and contributed to a 1.7% increase in group revenues to €13.9 billion.
Latin America also saw higher subscriber growth than Europe, recording growth of 8.1% to 173.2 million users year-on-year, compared with Europe’s 6.7% rise to 53.9 million.
However, group OIBDA fell 4.1% to €5.1 billion in Q110, due to commercial activities, regulatory, and one-off events, the firm stated.
Despite the drop, the firm said it met its own targets for Q1, and was standing by its full-year outlook.