Short update Portugal Telecom /OI: Sale of 6.1% stake by Caixa Geral

In my first post on the PTC/OI merger I wrote among others the following:

For some PTC shareholders, the problem might be that the suddenly do not hold a Portuguese/European stock but a Brazilian one. According to the official announcement, the new stock will be listed in Brazil, US and on NYSE Euronext, so technically it should be not a problem for shareholders.

Today, Government owned Portuguese Bank Caixa Geral, which owns 6.1% in PTC announced to sell their stake:

Oct 24 (Reuters) – Portugal’s state-owned bank Caixa Geral de Depositos will sell its outstanding 6.11 percent stake in Portugal Telecom in a private sale as part of plans to sell non-core assets, the bank said on Thursday.

The sale of 54.77 million shares will be carried out via an accelerated bookbuilding process aimed at certain investors.

I am not sure if they wanted to sell anyway or if they have issues to hold a Brazilian stock, but in either case I think such a sale provides a good opportunity.

The stock has been currently suspended from trading, but I will try to increase my 0.5% stake to 1% today.


  • Obviously it’s not that they got a letter co-signed by Barroso, Lagarde and Draghi, but Caixa Geral is stated owned and the state is putting pressure on all nationalised banks to sell participations. Bankia has done Abertis, FCC, Sacyr, Mapfre… for c€3bn and they are likely to sell Iberdrola, NH Hoteles, Deoleo and Realia in the coming months, actually booking a gain in all of them after being hugely provisioned.

    Anyway, I think PT is a risky bet until we get visibility on execution and potential dilution for Oi minority shareholders -who you don’t wanna annoy too much-. But by then it will be too late.

  • I think it is not that they wanted to sell or that they have any issues holding a Brazilian stock… It’s actually the Troika forcing them to sell.

    In any case, this intention is already stated in Caixa’s annual report from early this year so no surprise.

    If the stock is quite weak, I agree it is a good entry opportunity. Let’s see!

    • Ok, thanks for this info. As far as I know, under many banking risk models, there is a much higher charge for EM shares than European shares but I am not sure if they are subject to such a model.

    • I don’t belive the Troika is forcing Caixa to sell, but to raise (core) capital. I would be suprised to see the troika making such explicit demands.

      Was this announced sell by Caixa the trigger to increase position in PT? I can’t follow the logic. I admire your logical decision making overall.

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