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Telefónica takes on US lawyers as Vivo dispute nears litigation

Spanish telecoms operator Telefónica has hired the services of the US law office Dewey & Laboeuf as its assessor in possible legal action against Portugal Telecom in the two companies’ dispute over their Brazilian joint venture Vivo.

Telefónica earlier this week contracted Dutch legal firm De Brauw Blackstone Westbroek to advise it on winding up its Brasilcel joint venture with PT, which is based in the Netherlands.

Brasilcel is the holding company for the two Iberian operators' combined 60-percent stake in Vivo.

Telefónica last weekend spurned a request by PT's management for an extension of the deadline it had set for accepting its 7.15-billion euro offer to buy the Portuguese operator's 30-percent interest in Vivo, which is Brazil's largest cellphone firm.

PT shareholders overwhelmingly accepted Telefónica's offer at a meeting on June 30, but the Portuguese government used its golden share in the company to block the bid. Earlier in July, the European Court of Justice ruled that Portugal's use of the golden share broke European Union rules on free competition.

"One of the aspects that the firm will highlight in the arbitration battle is PT managers' possible failure to comply with obligations to inform the market, having hidden from Telefónica and PT shareholders the effective use of a golden share by the Portuguese government in cases which are different from those which appear under PT's statutes," Reuters quoted a Telefónica spokesman as saying Wednesday.

(Published by El País – July 22, 2010)

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Read more

7/9/2010 - Minister says Portugal will "respect" court's PT ruling - click here.

7/8/2010 - Court ruling may aid Telefónica's bid for Vivo of Brazil - click here.

7/5/2010 - Brazil's Oi gains on bets EU move to make stock takeover target - click here.

7/5/2010 - "The veto is to defend our interests" - click here.

6/30/2010 - Portuguese government blocks sale of Brazilian operator - click here.

6/14/2010 - PT may seek to freeze Telefónica Vivo voting rights - click here.

5/26/2010 - Portugal Telecom says Telefonica offer 'clearly insufficient' - click here.

5/12/2010 - Portugal Telecom rejects offer for Brazilian stake - click here.

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