SAO PAULO/RIO DE JANEIRO (Reuters) - Brazil’s securities industry watchdog CVM on Tuesday lifted a suspension on Grupo Oi SA’s (OIBR3.SA) 6 billion real ($2.7 billion) share offering, paving the way for the Brazilian telecommunications company’s merger with Portugal Telecom SGPS SA.
Regulators last week halted the transaction after Oi Chief Executive Officer Zeinal Bava breached a mandatory quiet period ahead of the offer. Oi and Grupo BTG Pactual SA BBTG11.SA, the bank handling the transaction, agreed to advise potential investors to ignore Bava’s remarks about the offer, a condition CVM said in a statement was enough to lift the suspension.
The offering is the backbone of Oi’s planned capital increase of 14 billion reais that will allow it to tie up with Portugal Telecom, also its biggest shareholder.
Last week, shareholders of Oi and Portugal Telecom approved the capital increase and separate asset appraisals at their respective assemblies in Rio de Janeiro and Lisbon. Executives at the companies say the combination will give the resulting entity more clout to compete inside Brazil with bigger rivals such as Spain’s Telefonica SA (TEF.MC), Telecom Italia SpA’s TIM Participações SA (TIMP3.SA) and Mexico’s America Movil SAB (AMXL.MX).
Reporting by Guillermo Parra-Bernal and Luciana Bruno; Editing by Lisa Shumaker