Bloomberg.com: Venezuela to Make `Reasonable' Offer for Cantv (Update1)

Venezuela to Make `Reasonable' Offer for Cantv (Update1)

By Alex Kennedy

Jan. 26 (Bloomberg) -- Venezuela will make a ``reasonable'' offer for CA Nacional Telefonos de Venezuela as part of President Hugo Chavez's plan to nationalize telephone and electricity companies, Telecommunications Minister Jesse Chacon said.

``It will depend a lot on the attitude of the owners,'' Chacon said during a televised news conference in Caracas. ``If we don't reach an agreement with the owners, we'll apply the expropriations law and declare it a public utility. If the owners are willing to sell at reasonable terms, we're open to that possibility.''

Chacon didn't say what might constitute a reasonable offer or what terms might apply to an expropriation.

Chavez said Jan. 21 that the government will not pay the ``international'' price for Cantv and will take over the company before paying compensation to shareholders. Chavez said Jan. 8 that the government will nationalize telephone and electricity companies because they are ``strategic.''

``Is it better that Cantv be in the hands of a private, transnational company that wants short-term profit or in the hands of the state that wants to expand telephone coverage,'' Chacon said. ``I prefer the state.''

Verizon Communications Inc., the second-largest U.S. phone company, owns 28.5 percent of Cantv.

Shares of the company's American depositary receipts closed down one cent, or 0.1 percent, in New York. Shares have fallen 37 percent since Jan. 5.

To contact the reporter on this story: Alex Kennedy in Caracas at akennedy1@bloomberg.net .

Last Updated: January 26, 2007 18:32 EST