Portugal uses ‘golden shares’ to block Telefonica’s Vivo bid
01.07.2010
The Lisbon government has vetoed Telefónica’s €7.15bn bid to buy out Portugal Telecom from Vivo, a Brazil-based mobile phone joint venture.
The government used Portugal’s ‘golden shares’ to block the bid, going against the wishes of 74 per cent of shareholders who voted in favour of the offer.
The golden shares give the state veto rights over strategically important company decisions.
The state believes the bid was not in the interest of Portugal, as it is considered important to maintain the size of the company, which is the country’s largest, by market value.
It is expected that the European Commission and Telefonica will raise a legal challenge to the government’s intervention.
