Embratel Participacoes Thursday reported that it is keen on offering to purchase all the shares of Net Servicos. Embratel Participacoes, a Brazilian phone company, said it will offer the purchase of 100% of Net Servicos, considered the biggest cable television operator in Brazil. In that regard, Embratel said it will be making an offer of 4.58 billion reals for the potential takeover. Embratel Participacoes is controlled by Mexican company, America Movil and the company said it had offered to buy all the preferred stock it does not currently have in Net Servicos.

The Mexican company, America Movil is owned by Mexican billionaire and the world’s second richest man, Carlos Slim and according to analysts; the move is in line with the billionaire’s quest to consolidate his telecommunications empire in the Latin America continent. In the deal, Embratel will remit 23 reals per preferred share of Net Servicos; said a statement sent to the regulators in a filling.

Embratel was formerly owned by the Brazilian government that later disposed it off in a sale. Headquartered in Rio de Janeiro, the company said the transaction would potentially earn it the 4.58 billion reals if all shareholders of Net Servicos approve the offer in a voting. With the announcement, Net Servicos shares went up by 2.5% to close at an impressive 19.99 reals.

Net Servicos shares have been on the decline this year, dropping by about 16.7% when compared to a 0.5% drop in the benchmark BOVESPA index. Currently, Carlos Slim’s company, America Movil controls 98% of Embratel’s stock via its unit, Telmex. On the other hand, Embratel owns about 37.9% of Net Servicos voting share and about 21.2% of the preferred stock and is keen on full takeover with this bid.

Embratel Participações S.A begun in 1998 as one of the holding companies resulting from the breakup of the Telebrás System. It controls Empresa Brasileira de Telecomunicações S.A., the premium telecommunications carrier in Brazil that offers a wide range of advanced telecommunications services over its state-of-the-art network.

Globo Participacoes, the Brazilian media giant owns around 60% of Net Servicos’ voting stock and less than 1% of its preferred shares. On the other hand, BlackRock and Cyrte Investments are funds that own around 85% of Net Servicos’ preferred stock. Slim's Telmex and America Movil, both based in Mexico City, are currently joining forces to create a powerhouse better-placed to take on rivals like Spain's Telefonica.

6 Aug 2010.