Telefonica will seek the dissolution of its Brasilcel joint venture with Portugal Telecom if its €7.15 billion bid for the Portuguese telco’s stake is not accepted by Friday.
Lawyers for the Spanish telco are preparing to argue that the 50:50 joint venture is no-longer viable and should be abandoned in a case to be heard by the Permanent Court of Arbitration, a court based in The Hague that rules on cross-border disputes between companies, FT.com reports citing sources within the company.
Telefonica left its offer for Portugal Telecom’s stake on the table until July 16, after the Portuguese telco’s shareholders decision to accept the bid was overruled by the country’s government.
The European Court of Justice has since ruled that the government’s golden share in Portugal Telecom is illegal, clearing the way for Telefonica’s legal action, however Portugal’s Prime Minister still refuses to green-light the deal, FT.com said.
Telefonica’s chairman Cesar Alierta yesterday warned the telco would not extend its offer beyond Friday, WSJ.com reported.
Fresh talks between the firms were opened last Friday after their respective governments called for a deal to be thrashed out, WSJ.com said.