Shares in Portugal Telecom soar almost 10 percent on a news report that Telecom Italia (Other OTC: TIAJF - news) 's Brazilian mobile unit TIM Brasil could be split between several rivals including PT's partner Oi (NYSE: OIBR - news) .
"The possibility of PT-Oi benefiting from what remains from the potential split-up of TIM Brasil is the apparent main driver behind the rise, which is also exacerbated by a very positive day on the Portuguese bourse," says Diogo Oliveira, a trader at Banco Best in Lisbon.
Italy's Il Sole 24 Ore newspaper reports that Spain's Telefonica (Madrid: TEF.MC - news) , which partly owns TIM Brasil, is looking to set up an investment vehicle with Oi and Claro - its two main rivals on the Brazilian mobile market - to buy the unit and break it up.
Banco BPI analysts consider such a scenario as "a strong possibility" and say Portugal Telecom "would likely be the company benefiting more from this scenario given that we believe Oi's involvement would be unavoidable". PT has a 25 percent in Oi and is in the process of merging with the Brazilian company.
Telefonica declined to comment on the situation while Telecom Italia said in a statement on Friday that it was not aware of any offer for its Brazilian unit.