Bloomberg News

Telemar Units Rise as CVM Rejects Complaints: Sao Paulo Mover

February 24, 2012

Units from Telemar Participacoes, the Brazilian telephone-service provider that operates the Oi brand, jumped after Brazil’s securities regulator rejected complaints against the company’s restructuring process.

Telemar Norte Leste SA (TMAR5)’s shares gained 2 percent to 42.17 reais at the close of trading in Sao Paulo, while Tele Norte Leste Participacoes SA (TNLP3) rose 0.1 percent to 17.66 reais after earlier jumping as much as 5.3 percent. Brasil Telecom SA (BRTO4) fell 2.7 percent to 10.97 reais, reversing an earlier advance of 2.8 percent.

The securities regulator known as CVM rejected complaints from minority shareholders in the company against the restructuring process, according to a statement published on its website yesterday.

The ruling is “an important step toward getting the ongoing shareholder restructuring process approved, which, at the outset, is positive news to all shares of the Oi-Telemar group,” Valder Nogueira, Bruno Mendonca and Gregorio Tomassi, analysts at Banco Santander SA, wrote in a note to clients.

The company scheduled a shareholder meeting for Feb. 27 to vote on the restructuring plan to merge the units into one entity that will trade under the name Oi SA.

Under the proposal, each Tele Norte common share will be exchanged for 2.3122 Brasil Telecom common shares, according to a regulatory filing on Aug. 29. Tele Norte’s preferred stock will be exchanged for 1.9262 Brasil Telecom preferred shares and 0.1879 of Brasil Telecom’s common shares.

Telemar Norte Leste’s common shares will be exchanged for 5.1149 Brasil Telecom similar stocks, the company said in the filing. Telemar Norte Leste’s Class A and B preferred stock will be swapped by 0.3904 Brasil Telecom common shares and 4.0034 Brasil Telecom preferred stock.

To contact the reporter on this story: Katerina Petroff in Sao Paulo at kpetroff@bloomberg.net

To contact the editors responsible for this story: Helder Marinho at hmarinho@bloomberg.net; David Papadopoulos at papadopoulos@bloomberg.net


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