Venezuela, Verizon reach CANTV deal

The government of Venezuela has agreed to pay Verizon $572 million for its 28.5% stake in the country's national telecom operator, CANTV, Reuters has reported.

The sale price is about $105 million lower than America Movil had pledged previously to pay for the stake, but bombastic Venezuelan President Hugo Chavez has been wanting to nationalize CANTV as part of a plan to nationalize all of the country's public utility service. The last month or so has been rife with speculation as to whether or not the government would pay fair market price for the Verizon stake.

The government bid comes out to about $17.85 per American Depository Share. Some analysts have suggested in recent weeks--as Reuters reported late yesterday--that reasonable market price would be much higher, around $21 per ADS. However, Stifel Nicolaus said in a research note following the announcement of the agreement that $572 million might be a reasonable value for the stake, given that it is being nationalized.