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AdC’s philosophy is obscene for PT, which may see the value of the OPA increased (Updated)

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In the report sent to the Competition Authority, Portugal Telecom considers the regulator’s philosophy «obscene», which it accuses of taking advantage of the opportunity to separate networks to tolerate the «creation of a dominant position in the mobile market». In the same report, quoted by Jornal de Negócios, PT accuses AdC of going against «what the law says, that is, prohibiting a concentration that results in the creation of a dominant position in the mobile market».

In the 34 pages of response to the AdC, PT also considers that the remedies aligned by the regulator «are tailored to Sonaecom’s interests» and adds that they allow an «almost monopolistic exploration of the fixed and mobile voice markets».

In the two times that it was asked to comment on the preliminary decisions of the AdC, PT presented arguments against the operation to acquire its capital by Sonaecom, trying to avoid a green light from the regulator to the largest business ever carried out in Portugal.

In addition to the concentration that instills in the sector, the operation should not, in the opinion of PT’s management, take place because it does not offer a fair value for the group, Henrique Granadeiro reiterated last week in an interview with RTP.

Today’s edition of Diário Económico guarantees that Sonaecom may be willing to change its value proposal, which sets a price of 9.5 euros for each PT share.

The daily states that Sonaecom will be available to explore with the operator’s management a potential increase in the offer if Henrique Granadeiro’s team shows interest in demonstrating that there are gains not quantified by Sonaecom when it defined the offer price.

The possibility would have arisen following meetings with one of PT’s largest shareholders (BES with a 10 per cent position) maintained by the two administrations – PT and Sonaecom – separately.

Meanwhile Ricardo Salgado, president of BES, repeated to the newspaper what he had already said in an interview with Expresso: «it will not be easy for an increase that convinces BES to sell». PT for its part rejects the idea of ​​having been challenged by Sonaecom to study a revision to the OPA price.

A final AdC decision is expected to be announced between tomorrow and Monday. A yes is expected from the body led by Abel Mateus who, in the two known decision projects, proved to be in favor of the operation.

In reaction to the DE news, Sonaecom said, through the director LuĂ­s Reis, that for now there is no reason to increase the offer price to PT. The official added that if the takeover bid was placed on the market today, more than half of the shareholders would sell their securities for the proposed 9.5 euros.

Speaking to Jornal de Negócios, the official stated that Sonaecom «does not see any operational, financial or other reason to revise the price upwards».

Luís Reis added to Lusa: «if the operation were today, we are firmly convinced that more than half of PT’s shareholders would sell».

Henrique Granadeiro, PT’s president, refuses to comment further on the OPA. «We do not comment on the nonsense uttered by Dr. Luís Reis», says only the official referring to a possible opening of PT to recommend the sale of the company to Sonaecom if the offer was higher, also writes Lusa.

Editorial Note: The news was updated with statements by the heads of Sonaecom and PT.

Related News:

2006-12-05 – Sonaecom takeover bid on PT receives new positive opinion from AdC

2006-09-28 – AdC gives green light to Sonae’s takeover bid on PT with aggressive remedies