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Name | Symbol | Market | Type |
---|---|---|---|
Telefonica Brasil SA | NYSE:VIV | NYSE | Depository Receipt |
Price Change | % Change | Price | High Price | Low Price | Open Price | Traded | Last Trade | |
---|---|---|---|---|---|---|---|---|
-0.10 | -1.12% | 8.85 | 8.99 | 8.85 | 8.95 | 1,063,693 | 22:26:58 |
Brazilian federal prosecutors have opened an investigation into the recent purchase of local telecom operator GVT Holding SA (GVTT3.BR) by French media giant Vivendi SA (VIV.FR, VIVDY, VIVEF), a prosecutor said Tuesday.
Rio de Janeiro-based Prosecutor Claudio Gheventer said he is conducting inquiries into allegations printed in local newspapers that the deal didn't respect the rights of minority shareholders.
The federal investigation is in its initial stages and will run alongside one already started by the Brazilian Securities and Exchange Commission, or CVM.
The controversy started in September when Vivendi launched a bid for GVT, a small alternative telecom operator. Spain's Telefonica SA (TEF, TEF.MC) came in with counterbids and many had expected the dispute to be settled at an auction set for late November. But on Nov. 13, Vivendi surprised many by announcing that it had quietly acquired the rights to buy 37.9% of GVT and held options to buy another 19.6% from Tyrus Capital LLC, thus giving it the power to take control of GVT.
CVM is looking into allegations that Tyrus didn't have access to the shares it claimed to on Nov. 13 and that the fund wasn't qualified to hold such a large stake in GVT.
The French company claims that it didn't do anything that contravened Brazilian law and has supplied the CVM with all relevant information.
In a statement late Monday, CVM said that it continues its investigations and will only issue opinions on the subject at the end of the process.
Vivendi has subsequently raised its stake in GVT to 72% and claims that Telefonica's complaints about the manner in which the company gained control are moot as it is now undisputedly in control of the asset.
If CVM decides the actions of Vivendi contravened regulations, it could impose fines on the French firm. However, public prosecutors could ask a judge to freeze the takeover, if they believe there was wrongdoing.
Vivendi executives weren't immediately available for comment.
-By Alastair Stewart, Dow Jones Newswires; 5511 2847-4520; alastair.stewart@dowjones.com
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