Seeking Alpha

Oi tumbles after pricing stock offering; PT also off

  • Ahead of its merger with Portugal Telecom (PT -2.6%), Oi (OIBR -12.8%) is selling 2.14B common shares (inc. 397M ADS') and 4.28B preferred shares (inc. 829M ADS). The common ADS is being offered at $0.97 (below yesterday's close of 1.04), and the preferred ADS at $0.894.
  • Proceeds are expected to total $5.87B. PT will be buying R$5.7B ($2.59B) worth of shares through the offering.
  • Oi aims to use the offering to buy out the debt of controlling shareholder Telemar Participacoes, and to simplify its ownership structure so that each shareholder has an equal vote.
Comments (6)
  • BearOrBull
    , contributor
    Comments (3) | Send Message
     
    Existing oi shareholders see their shares being stolen this is an outrage! Why so low!
    29 Apr, 04:33 PM Reply Like
  • Leo Soong
    , contributor
    Comments (57) | Send Message
     
    Dear BearOrBull, If you are interested in why the price is so low, please read my Seeking Alpha article on OIBR. It is a pure abuse by the control shareholders with 18% of the shares to obtain 77% of the value of the Company (and that was before the most recent plunge). At current prices, they have probably taken 90% of the Company value pre this offering. However, the control group includes several government entities including the national development bank and government controlled pension funds so the fix was definitely in. This deal was approved by Brazilian regulatory authorities. Pure highway robbery in my humble opinion. Thanks, Leo
    29 Apr, 10:33 PM Reply Like
  • Small Fry
    , contributor
    Comments (279) | Send Message
     
    While I agree with you, PT's share price certainly doesn't reflect their purchase of assets at a firesale price. I don't think the market is accurately reflecting the great deal PT just got for Oi assets.
    30 Apr, 02:04 PM Reply Like
  • BearOrBull
    , contributor
    Comments (3) | Send Message
     
    Thanks do u see oi share price go up from here? Where is the bottom?
    29 Apr, 11:45 PM Reply Like
  • abs1990
    , contributor
    Comments (16) | Send Message
     
    Long term sure, short term look to see $0.50. Disgusting really.
    30 Apr, 01:53 AM Reply Like
  • jsv922
    , contributor
    Comments (11) | Send Message
     
    Does anyone think Zenial Bava can turn this company around? The debt load is tremendous.
    30 Apr, 08:20 AM Reply Like
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