Telemar, one of Brazil?s big three incumbent local exchange carriers, has rebutted rumors of a plan to absorb Oi, its wireless subsidiary. The rebuttal has just appeared in the FAQ section of its website, citing the law as the main obstacle. Anatel and the General Telecoms Act require a LEC?s wireless arm to be a separate legal entity, according to the explanation. Telemar trades on the São Paulo Stock Exchange (Bovespa) under ticker symbols TMAR for the operating company and TNLP for the holding company. Last week there was also a wave of rumor that TNLP planned to offer a stock swap to holders of shares in TMAR and then go private. The website says nothing about this but analysts tell TELETIME News a stock swap is ?a matter of time? and will have a negative effect on prices of both stocks. TMAR and TNLP have posted significant gains since mid-December, outperforming both the Bovespa Index and the separate telecoms index, Itel. TMAR preferred has risen 20% in the last 30 days, and TMAR common (ON) is up 33%. TNLP has gained 18% and 24% respectively. The Bovespa Index and Itel have each risen 15% in the same period. Majority shareholders tend to drive up the price by massive buying just before a swap to avoid the risk of losing control, analysts explain. That?s probably why the common stock has gained more than the preferred. Most preferred shares carry no voting rights in Brazil.
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