Portuguese state blocks Telefonica takeover bid: report

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The Portuguese government blocked on Wednesday a bid by Telefonica of Spain to acquire a stake in Brazilian telecom operator Vivo held by Portugal Telecom (PT), the Lusa news agency reported.

The government has a special blocking right in PT through a so-called "golden share."

News reports said that shareholders in Portugal Telecom had voted by a large majority at a general assembly to accept Telefonica's offer to buy PT's 50-percent stake in Brasilcel, the holding company controlling 60 percent of Vivo.

Just hours ahead of the meeting, Telefonica, which already holds a 50-percent stake in Brasilcel, increased its offer from 6.5 billion to 7.15 billion euros (8.7 billion dollars).

Portuguese Prime Minister Jose Socrates told parliament last Friday that he had given instructions to the public bank Caixa genral de depositos, a leading shareholder in Portugal Telecom, to vote against the Spanish offer.

He also said earlier this month that the government's "golden share" in PT was "there to be used when necessary."

© 2010 AFP

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