UPDATE 1-PT shares rise on talk of Vivo deal – traders

* PT shares jump 5 pct on talk of deal before retreating

* PT declines to comment, Telefonica says not aware of deal

* Telefonica bid for PT stake in Brazil’s Vivo ends Friday

(adds PT board meeting, more market quotes, background)

LISBON, July 15 (BestGrowthStock) – Portugal Telecom (PTC.LS: ) shares
jumped nearly 5 percent in early afternoon trade on market talk
of a deal to sell its stake in Brazilian wireless company Vivo
(VIVO4.SA: ) to Spain’s Telefonica (TEF.MC: ), traders said.

The shares retreated slightly after Portugal Telecom
declined to comment and a Telefonica spokesman said the company
was unaware of any deal. Telefonica’s 7.15 billion euro ($9.16
billion) bid for PT’s stake in Vivo expires on Friday.

“It could be a rumour or a message going around about an
agreement between PT and Telefonica,” said Luis Goncalves, a
trader at GoBulling brokerage in Porto.

PT shares jumped to 8.582 euros, a near 5 percent rise, but
later rolled back to 8.443 euros in heavy turnover of over 5.6
million shares. Telefonica was up 0.8 percent at 16.66 euros.

“I have not heard anything to suggest that the two sides will
be able to agree a deal by Friday,” said one senior London
banker, although he added that a deal was likely over the longer
term because Telefonica has coveted Vivo for years.

The Portuguese company’s board was meeting on Thursday, with
the Vivo deal set to be on the agenda after the Portuguese
government stunned investors this month by using its golden
share to block a shareholder vote in favour of selling the stake
to Vivo. [ID:nLDE65T0MI]

The European Court of Justice has since ruled the golden
share illegal, but the Portuguese government has said it will
continue to safeguard national interests. [ID:nLDE6670ID]

Portugal Telecom and Telefonica have vowed to continue
negotiations to reach an agreement over Vivo, which they control
jointly and which is Brazil’s biggest wireless operator.

Investing Advice
(Reporting by Elisabete Tavares, Daniel Alvarenga andĀ Andrei
Khalip in Lisbon, Victoria Howley in London, and Robert Hetz in
Madrid, writing by Shrikesh Laxmidas; Editing by Michael
Shields)

UPDATE 1-PT shares rise on talk of Vivo deal – traders