CTC board adjusts voting rules on mobile sale

Thursday, June 3, 2004

The board of Chilean telco Telefónica CTC Chile (NYSE: CTC) has formally accepted a request by minority shareholders to adjust the rules for voting on the sale of mobile division Telefónica Móvil, local press reported.

Four minority shareholders, Cuprum, Consorcio, Celfin and The Chile Fund asked for the threshold determining a majority vote to be raised to 66.7% rather than 50% plus one vote.

Shareholders are scheduled to vote no later than mid-July on the US$1bn offer made by Spain's Telefónica Móviles (NYSE: TEM) for CTC's mobile division, which was responsible for 29% of revenues in 2003 and is the company's fastest growing unit.

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The four minority shareholders represent almost 6% of CTC shareholders and come from a group of local pension fund administrators (AFPs), insurance firms and foreign venture capital firms that have a total stake of 28.4%. To overturn Telefónica Móviles' offer and force it to raise the bid this group will also depend on votes from holders of freely circulating shares that represent 13.3% of the firm.