LISBON — The board of Portugal Telecom, which runs Portugal’s largest pay-TV operator, has advised shareholders to reject a takeover bid made by rival telco Sonaecom.
The board said the revised offer of Euros 10.50 ($13.50) a share does not reflect PT’s true value.
Sonaecom’s CEO, Paulo Azevedo, expressed disappointment at the decision and claimed PT’s shareholders will be angered by the board’s move.
Spanish telecom giant Telefonica, PT’s second largest shareholder with 9.64% of the company and two seats on the board, abstained in the vote.
In a counterattack, PT’s board announced an ambitious plan to remunerate shareholders, which will be worth Euros 6.2 billion ($8 billion) by 2009, equivalent to Euros 5.60 ($7.20) a share.
This plan includes acquisition of shares at a maximum price of Euros 11.50 ($14.80) per share to a limit of 16.5% of PT’s total stock, and distribution of 180.6 million PT Multimedia shares, worth Euros 2 billion ($2.6 billion).
PT Multimedia controls Portugal’s largest pay-TV operator, TV Cabo, which has 1.4 million subscribers. This reps more than 80% of the local cable and satellite market.