Venezuela

Chavez Pays Market Price For Verizon Stake

Hugo Chavez, the socialist Venezuela leader, agreed on Monday to buy Verizon Communications' (VZ) 28.5% stake in the country's CANTV, the country's leading telecommunications provider.

Chavez offered $17.85 per CANTV ADR versus the $16.08 per share Monday trading price, an 11% premium. Last year, Carlos Slim, the Mexican billionaire offered $21 per share.

The CANTV offer follows the government's agreement to pay $740 million for AES's 82% stake in Electricidad de Caracas which was again close to the current trading value.

Anyway you look at it, Venzeula is a country that simply cannot get out of trouble. If its run by capitalists, the rich keep all the money and the poor get poorer and poorer. If the country is run by an extreme reformist, like Chavez, the state runs the businesses into the ground. If you even have an opportunity to go to Venezuela to evaluate investment opportunities, don't go. It is too tough of a place to make money whether a capitalist or communist is running the country.

February 13