Sonae bid wobbles Portugal Telecom outlook

February 7, 2006

Sonae's unsolicited bid for Portugal Telecom was seen in a somewhat dim light by financial analysts who feared the telco could be saddled with unwelcome debt.

Standard & Poor's announced in London Tuesday that it had placed a long-term A- rating on PT due to unanswered questions about Sonae's plans to finance the $12.8 billion deal.

"There has been no communication regarding proposed financing for the bid, but a leveraged deal structure is likely, given that the market capitalization of PT is several times that of Sonae," S&P analyst Leonardo de Torre Zabala said in a release. "In addition, PT's senior secured eurobond debt documentation offers no investor protection in the event of a takeover."

That warning, however, didn't seem to dissuade investors who bid PT shares up sharply Tuesday.

Sonae is a conglomerate controlled by Portuguese financier Belmiro de Avezedo that would become a dominant player in Portugal's wireless and landline sector if the deal goes through.

Portugal Telecom is a former state-owned utility. The government still holds shares in the company and can exercise influence on strategic matters.

Copyright 2006 by United Press International

Explore further: Nokia aims to become networks giant with Alcatel-Lucent deal

Related Stories

Nokia aims to become networks giant with Alcatel-Lucent deal

April 15, 2015

Nokia is to buy ailing French telecom company Alcatel-Lucent for around 15.6 billion euros ($16.5 billion) through a public exchange of shares in France and the United States, in a bid that will see the newly created company ...

Nokia in talks to take over Alcatel-Lucent (Update)

April 14, 2015

Finnish telecoms equipment maker Nokia said Tuesday it was in talks to purchase all of its Franco-American rival Alcatel-Lucent, with the aim of creating a telecoms and Internet technology behemoth.

Vivendi confirms offer for video sharing site Dailymotion

April 7, 2015

Vivendi, the Paris-based media multinational, confirmed an offer for the online video sharing platform Dailymotion on Tuesday, a day after a Hong Kong company blamed France's protectionist policies for its decision to abandon ...

Dailymotion should stay in European hands, France says

April 1, 2015

France opposes exclusive talks between Orange and Hong Kong's PCCW group for a 49 percent stake in Dailymotion, preferring a European partner for the French video-sharing platform, the finance ministry indicated Wednesday.

Recommended for you

New Horizons team selects potential Kuiper Belt flyby target

August 29, 2015

NASA has selected the potential next destination for the New Horizons mission to visit after its historic July 14 flyby of the Pluto system. The destination is a small Kuiper Belt object (KBO) known as 2014 MU69 that orbits ...

0 comments

Please sign in to add a comment. Registration is free, and takes less than a minute. Read more

Click here to reset your password.
Sign in to get notified via email when new comments are made.