Sonaecom's offer for Portugal Telecom ("PT") has entered its final phase. It is now up to PT's shareholders to crystallize their value by attending the Extraordinary General Meeting ("EGM") of 2 March 2007, voting in favour of amending PT's by-laws in order to remove the existing 10% voting right restriction for individual shareholders and authorizing Sonaecom to acquire more than 10% of PT's share capital, and tendering their shares on or before 9 March 2007.
We remind PT's shareholders that today, February 23, 2007, is the deadline for shareholders to submit to the Chairman of PT's EGM their letters certifying that the shares are blocked and therefore eligible to vote at the EGM that will take place on 2 March 2007. In accordance to CMVM's decision made public on 22 February 2007, PT shareholders have the right to unblock their shares at any time up to one business day prior to the EGM, i.e. 1 March 2007.
In an effort to avoid any misinformation, we clarify that the amendment of PT's by-laws requires shareholders representing at least one third of the share capital to be present or represented at the EGM and approval by a two-thirds of the votes cast. Votes abstained will not be counted as a vote cast when assessing the EGM results in accordance with Portuguese corporate law.
Sonaecom has put forward its best and final Offer, offering full value to PT's shareholders. Sonaecom's EUR10.50 per share best and final cash offer is at a significant premium to PT's fundamental value, reflecting the payment of transaction synergies and represents a significant premium to all the relevant comparable valuation metrics. Sonaecom's EUR10.50 per cash offer for PT implies:
- An EV / LTM EBITDA 07 multiple of 8.4x representing a EUR3.6bn premium to similar change of control transaction multiples;
- An EV / EBITDA 07 multiple of 8.4x; an EV / OpCF 07 of 14.4x; and a P/E of 20.2x representing an overall EUR3.1 bn premium to current telecom peer trading multiples despite a circa 30% telecom sector market rally;
- A EUR2.1bn premium to market analysts' fair valuations.
Recent, consistent attempts to mislead and misinform the market are not in the interests of shareholders. Misleading comments being communicated to the market are yet another attempt to block the deal at any price and are certainly not in line with the best corporate governance practices and are against shareholder democracy.
The EGM will determine whether the shareholders as a whole will have the right to gain access to Sonaecom's offer and determine the future of their PT investment. If the proposed amendment of PT's by-laws is not approved on 2 March 2007, Sonaecom's offer will lapse and fail, thus denying shareholders the individual choice of accepting or not Sonaecom's premium value cash offer today.
Only a few shareholders have anything to gain from such a scenario. PT's Board and management should focus on their fiduciary duties to all of PT shareholders and ensure that the principles of best corporate governance practice prevail.
The momentum behind Sonaecom's offer has clearly been built-up over the last few days as PT shareholders block their shares and prepare to vote to have the right to accept Sonaecom's premium cash offer and to uphold the basic principles of one-share/one-vote and shareholder democracy.
This announcement relates to the tender offer being made in Portugal (the "Portuguese Offer") by Sonaecom, SGPS, S.A. ("Sonaecom") and Sonaecom, B.V. for all ordinary shares and class A shares of Portugal Telecom, SGPS, S.A. ("PT"). The Portuguese Offer is made solely by a prospectus containing and setting out the terms and conditions of the Portuguese Offer (the "Portuguese Prospectus"). PT investors and security holders are urged to read the Portuguese Prospectus regarding the tender offer for PT in Portugal, because it contains important information. The Portuguese Prospectus and certain complementary documentation have been filed in Portugal with the Portuguese Securities Market Commission (Comissao do Mercado de Valores Mobiliarios) (the "CMVM"). Free copies of the Portuguese Prospectus are available on the CMVM's website at http://www.cmvm.pt/. The Portuguese Prospectus is also available from Sonaecom on its website at http://www.sonae.com/. Copies of the Portuguese Prospectus will not be mailed or otherwise distributed in or sent into or made available in the United States.
U.S. persons who hold ordinary shares of PT and holders of American Depositary Shares of PT wherever located may participate the tender offer by Sonae, SGPS, S.A. ("Sonae"), Sonaecom, and Sonaecom, B.V. (together with Sonae and Sonaecom, the "Purchasers"), for PT shares being conducted in the United States. The Purchasers have filed with the United States Securities and Exchange Commission (the "SEC") a statement on Schedule TO, which includes an offer to purchase and related offer materials for all ordinary shares held by U.S. persons and for PT ADSs held by holders wherever located (collectively, the "Tender Offer Statement"). PT has filed a Solicitation/ Recommendation Statement on form Schedule 14D-9 with the SEC. U.S. persons who hold ordinary shares of PT and holders of American Depositary Shares of PT wherever located are advised to read the Tender Offer Statement and the Solicitation/Recommendation Statement because they contain important information. U.S. INVESTORS AND U.S. HOLDERS OF PT SECURITIES AND ALL HOLDERS OF ADSs ARE URGED TO READ THE OFFER TO PURCHASE, THE STATEMENT ON SCHEDULE TO, AND ANY OTHER RELEVANT DOCUMENTS FILED WITH THE SEC, AS WELL AS ANY AMENDMENTS AND SUPPLEMENTS TO THOSE DOCUMENTS, BECAUSE THEY CONTAIN IMPORTANT INFORMATION. Investors and security holders may obtain free copies of the offer to purchase and related offer materials and the statement on Schedule TO, as well as other relevant documents filed with the SEC, at the SEC's website at http://www.sec.gov/. The offer to purchase and other transaction-related documents are being mailed to holders of PT securities eligible to participate in the U.S. offer and additional copies may be obtained for free from Innisfree M&A Incorporated, the information agent: 501 Madison Avenue, 20th Floor, New York, New York 10022, Toll Free (888)-750-5834, Banks and Brokers Call Collect (212)-750-5833.
This announcement does not constitute an invitation to sell or an offer to buy any securities or a solicitation of any vote or approval.
This announcement may contain forward-looking information and statements about Sonae, Sonaecom, PT or their combined businesses after completion of the proposed U.S. and Portuguese offers, based on the Purchasers' current expectations or beliefs. Forward-looking statements are statements that are not historical facts. These forward-looking statements may relate to, among other things: management strategies; synergies and cost savings; future operations, products and services; integration of the businesses; market position; planned asset disposal and capital expenditures; net debt levels and EBITDA; and earnings per share growth, dividend policy and timing and benefits of the offer and the combined company. These forward-looking statements are subject to a number of factors and uncertainties that could cause actual results to differ materially from those described in the forwarding-looking statements, including, but not limited to, changes in regulation, the telecommunications industry and economic conditions; the ability to integrate the businesses; obtaining any applicable governmental approvals and complying with any conditions related thereto; costs relating to the offer and the integration; litigation; and the effects of competition. Forward-looking statements may be identified by words such as "believes," "expects," "anticipates," "projects," "intends," "should," "seeks," "estimates," "future" or similar expressions. Although these statements reflect our current expectations, which we believe are reasonable, investors and PT shareholders are cautioned that forward-looking information and statements are subject to various risks and uncertainties, many of which are difficult to predict and generally beyond our control, that could cause actual results and developments to differ materially from those expressed in, or implied or projected by, the forward-looking information and statements. You are cautioned not to put undue reliance on any forward-looking information or statements. We do not undertake any obligation to update any forward-looking information or statements.
Sonaecom
Contacts details: Fiona Laffan +44-(0)20-7404-5959
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