Telefonica has announced a capital hike of around EUR 3.05 billion to part fund its EUR 7.2 billion purchase of Brazilian broadband operator GVT. In a statement to Spain's market regulator CNMV, the Spanish operator said it planned to sell some 281 million shares for EUR 10.84 each, with Telefonica shareholders given preferential rights to subscribe to the new shares. The announcement came after the company had confirmed that it had finally received the approval of Brazil’s antitrust authority, Cade, to acquire GVT from French media group Vivendi.
As part of the GVT deal, Telefonica last week agreed to waive its voting rights in Telecom Italia to comply with the regulator’s demands. Cade also approved the break up of the Telefonica-dominated Telco SpA investor group that has controlled Telecom Italia for years. The demerger of the Telco pact was confirmed in a Telco board meeting held in June last year and the following month Telefonica sold bonds exchangeable into stocks to cut its stake by about a third. Subsequently, the Spanish company offered Vivendi a right to around 8 percent of Telecom Italia as part of its bid to buy GVT. As a result, Vivendi is expected to be confirmed as Telecom Italia's largest single shareholder at a 20 May meeting.
