Brazil's third biggest phone company, Brasil Telecom, denied yesterday that it is holding merger talks with larger rival Telemar, after reports in local media saying a deal was imminent.
Brasil Telecom also issued a statement yesterday where its controlling shareholders, a group made up by Citigroup and several Brazilian pension funds, said they have hired financial advisers "to evaluate strategic alternatives" for Brasil Telecom, although possible agreements were not even in the preliminary stages.
Telemar said earlier yesterday it had hired financial advisers to study potential acquisitions and an overhaul of its shareholder structure, fuelling speculation it would take over Brasil Telecom. The Telemar statement came just days after weekly news magazine IstoE reported Telemar had made an offer for Brasil Telecom.
Veja, another news magazine, reported in its online edition yesterday that Telemar had sealed a deal to buy the stakes held by Citigroup and the pension funds for 4.8 billion reais ($2.71 billion). The deal had been closed on Monday, Veja said without citing sources.
Telemar's non-voting shares have surged more than 15% and Brasil Telecom shares have climbed almost 7% in the last two sessions on the takeover talk.
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