Angola's dos Santos becomes top Zon shareholder

LISBON Wed May 9, 2012 5:36am EDT

LISBON (Reuters) - Angolan investor Isabel dos Santos, the daughter of the country's president, bought a further 5 percent of Portugal's leading pay-TV and Internet provider Zon Multimedia from Spain's Telefonica, making her its largest shareholder, Zon said.

Dos Santos' total share in Zon's capital rose to 15 percent and the move was her second foray into Portuguese companies this week after she bought a 9 percent share in Portugal's third-largest listed bank Banco BPI.

Zon shares were up 2.9 percent to 2.649 euros in early trade on Wednesday after the announcement of the deal that came late on Tuesday, sailing against the wind while Lisbon's stock index was 0.5 percent lower.

Sources close to the deal told Reuters dos Santos paid Telefonica 2.5 euros per share in a transaction worth a total of 38 million euros.

Dos Santos, the entrepreneurial daughter of Jose Eduardo dos Santos, the long-serving leader of Portugal's former colony Angola, has been actively investing in Portugal.

"Good news for Zon, it is a strong investor at a tough time for Portugal in which any money coming in counts," said Nuno Milheiro, a trader at Dif Broker.

Analysts believe Angolan cash can be instrumental in helping companies endure the shocks of Portugal's deep recession as it implements tough austerity measures under a 78-billion euro EU/IMF bailout package. They say the deal increases the chances of Zon embarking on mergers and acquisitions.

"This is positive for Zon and Sonaecom as it raises the speculative angle. As Mrs. Isabel dos Santos increases the stake in Zon we believe that the merger with Sonaecom becomes more likely," BPI analysts wrote in a report.

Market experts have long argued that four telecom operators in a mature market and recession-hit economy like Portugal are at least one too many.

Zon and telecoms group Sonaecom are seen as the most likely candidates to form a joint outfit, thanks to the sizeable synergy savings and the advantages of jointly competing against former monopoly Portugal Telecom.

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