Often happens when a merger deal involving a new issue of shares is involved. It is very unclear from the language just what is happening here, but it does seem that new shares are being issued in exhange for the Brasil Telecom stock. There is also a large (35%) premium being paid. Arbitrageurs are selling short TNE to buy BRP. They will cover when the new shares are issued.
This temporarily depresses TNE. Provides a buying opportunity, IMO.
Thanks for input Vaalie. I agree that this whole deal has been very confusing. The CEO announcing they may take out the preferred float is probably what is causing the most angst for TNE. I was expecting this to cost US$5 billion max.
Of course, long term its all for the best, but it will take patience.