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Portugal Telecom, SGPS, S.A. And Oi S.A. Announce They Have Executed A Memorandum Of Understanding For The Merger Of Their Activities

Stocks in this article: OIBR

In the proposed Merger of Shares, holders of Oi common shares will receive one new common share issued by CorpCo in exchange for each common share of Oi that they hold, and holders of Oi preferred shares will receive one new common share issued by CorpCo in exchange for each 1.0857 preferred share of Oi that they hold. All ratios in the mergers that are part of the Transactions were established based on market prices of the shares of Oi in a period of 30 days and considering the shares of Oi that the companies involved in the operation directly or indirectly hold, assuming that such companies will not hold any liabilities or assets (or will have cash or cash equivalents equal to their respective liabilities).

Holders of shares of Oi will not be entitled to withdrawal rights in the proposed Merger of Shares under art. 137, II of the Brazilian Corporations Law. Shareholders of CorpCo that dissent from the resolution approving the proposed Merger of Shares will have the right to withdraw from CorpCo, subject to the provisions of art. 137 of the Brazilian Corporations Law, at a value per share equal to the per share book value. However, we do not expect that the shareholders of CorpCo will exercise their withdrawal rights.

Pursuant to art. 137, Section 1 of the Brazilian Corporations Law, dissenting shareholders who are entitled to withdrawal rights may only exercise such rights in relation to the shares they hold continuously as of the end of the trading day on October 1, 2013 to the date of exercise of the right of withdrawal. Shares acquired on or after October 2, 2013 will not entitle their holders to withdrawal rights with respect to the Merger of Shares. The transfer of ownership of shares during the period set forth above (including the holding of so-called "loaned" or "rented" shares) will result in the loss to the respective shareholder of the ability to exercise withdrawal rights in respect of the shares transferred.

Portugal Telecom Merger ( Incorporacao )

Portugal Telecom will merge with and into CorpCo (the "Portugal Telecom Merger") pursuant to art. 227 of the Brazilian Corporations Law. As a result of the proposed Portugal Telecom Merger, Portugal Telecom's assets will be transferred by operation of law to CorpCo. The Portugal Telecom Merger will be submitted to the General Meeting of shareholders of CorpCo for consideration in conjunction with the Merger of Shares. In addition, the Portugal Telecom Merger will be submitted for consideration to the General Meeting of shareholders of Portugal Telecom. At the time of the proposed Portugal Telecom Merger, Portugal Telecom will have no assets or liabilities (or will have cash and cash equivalents equal to its liabilities), other than shares of CorpCo. In the proposed Portugal Telecom Merger, the shareholders of Portugal Telecom will receive a number of common shares issued by CorpCo equal to the number of common shares of CorpCo that will be held by Portugal Telecom immediately prior to such merger.

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