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Brazilian mobile phone giant Oi denies reports of offer from Portugal Telecom Ltd

Brazilian mobile phone giant Oi has denied reports that it is considering a possible minority share sale to Portugal Telecom. Reports emerged Thursday that Oi, Brazil’s biggest phone company had reportedly said it would support a move for a minority stake from the Portuguese telecoms firm. The company said the reports were false and that the said source, the company’s Investor Relations Director had been misquoted over the Portugal Telecom affair.

However, speculation has been rife for quite some time now that Portugal Telecom was keen on securing a stake in another Brazilian telecoms company after the failure of the Telefonica bid for Portugal Telecom’s stake in Vivo, another Brazilian major in the telecommunications industry. The company denied it was considering such a move from Portugal Telecom SGPS SA and instead said categorically that the two firms had not entered any talks.

The report had first appeared in the Brazilian Newspaper Estado de S. Paulo and carried comments to the effect that Oi was already in talks and would be ready to welcome a minority stake shareholding offer from Portugal Telecom if it made the move. Apparently, Oi’s Alex Zonig had given comments that insinuated the company had considered the possibility of such a move and would accept it. Estado quoted the Investor Relations head at Oi reiterating that the company had thought about a possible stake sale and it would be open to any offers from the Portuguese firm.

Earlier on, Oi controller, Telemar Participacoes SA had also reiterated that the two companies had not entered any preliminary talks, neither had they agreed in principle on any stake sale over any of their subsidiaries. The paper had further indicated that Oi was considering Portugal Telecom’s offer only as a minority shareholder so that it can remain under Brazilian ownership.

However, analysts believe the Portuguese Telecom’s firm is scouting around for an investment in the Brazilian telecoms industry and it might not be long before it makes an announcement. Portugal Telecom had received an offer to sell its stake in Vivo but the deal flopped after it was blocked by the Portuguese government, its major shareholder.

Oi, formerly known as Telemar, but still legally called Telemar Norte Leste S.A., is the largest landline telephone company in Brazil and the second biggest in Latin America, behind Mexican América Móvil with regard to both lines in service and revenues. It is headquartered in Rio de Janeiro.

24 July 2010.