RIO DE JANEIRO, March 26 Brazil's securities
watchdog late Tuesday rejected complaints from minority
shareholders of telecommunications company Grupo Oi SA's
related to its merger with Portugal Telecom
and gave a green light to a March 27 shareholder meeting to
discuss the terms of the tie-up.
The regulator decided that Oi's controlling shareholders are
allowed to vote at the meeting, which is expected to approve the
valuation of Portugal Telecom's assets to be used in a share
offering worth 8 billion reais ($3.5 billion) by Oi.
The capital increase is a key step in the merger process but
minority shareholders led by fund manager Tempo Capital have
challenged it, saying their stakes would be diluted because
Portugal Telecom's assets are overvalued.
Regulators said they did not yet have an opinion on the
dilution claims because the matter was "complex" and was still
being studied. But they said the March 27 meeting could be held
since any possible conflict of interest between shareholders
would not be directly related to the topics that would be
Portugal Telecom and Oi have been discussing how to tie up
since Portugal Telecom bought 25 percent of Oi in 2010.
Oi's largest shareholders, most of them local groups and
pension funds as well as Portugal Telecom, hope a deal would
give the struggling Oi more clout to compete inside Brazil
against bigger rivals such as Spain's Telefonica SA,
Telecom Italia SpA's TIM Participações SA and
Mexico's America Movil SAB.
($1 = 2.3 Brazilian reais)
(Reporting by Luciana Bruno; Writing by Walter Brandimarte;
Editing by Jeffrey Benkoe)