By Christopher Bjork
MADRID--Spanish telecommunications giant Telefonica SA (TEF.MC)
will sell 281.2 million shares to existing shareholders to raise 3
billion euros ($3.3 billion) for its acquisition of Brazilian cable
operator GVT.
In a regulatory filing published late Wednesday, Telefonica said
the new shares will be sold at EUR10.84 each. The decision was
taken at a board meeting Wednesday, hours after the Spanish firm
received approval for the takeover from Brazil's competition
regulator CADE.
France's Vivendi SA (VIV.FR) agreed in September to sell GVT to
Telefonica for EUR7.24 billion, and the Spanish company first
outlined its plans to launch a rights issue at that time.
The acquisition will bolster Telefonica's position as the
leading telecommunications firm in Latin America's biggest economy,
reinforcing its broadband Internet and fixed-line telephone
operations with GVT's assets.
Telefonica is paying Vivendi EUR4.66 billion in cash, which it
will raise with a separate capital increase at Telefonica Brasil.
The Madrid-based parent company, which owns 74% of its Brazilian
unit, will pay for its share of that capital increase with the EUR3
billion rights issue.
Vivendi is also receiving a stake in Telefonica Brasil and
shares in Telecom Italia SpA (TIT.MI) as part of the agreement.
Wednesday's approval from CADE was the last formal step for
Telefonica to complete the purchase. Earlier this month, the deal
was rubber-stamped by Brazil's telecommunications regulator,
Anatel.
-Write to Christopher Bjork at christopher.bjork@wsj.com
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