A towerco backed by Goldman Sachs and JP Morgan’s Brazilian hedge fund Gavea Investimentos has emerged as a bidder for TIM Brasil’s tower portfolio.
Bids are expected by the end of the month and the firms’ venture, Cell Cite Solutions, has…
A towerco backed by Goldman Sachs and JP Morgan’s Brazilian hedge fund Gavea Investimentos has emerged as a bidder for TIM Brasil’s tower portfolio.
Bids are expected by the end of the month and the firms’ venture, Cell Cite Solutions, has submitted a letter of interest, people familiar with the matter told Bloomberg.
Morgan Stanley is managing the sale of the 6,000 towers, for which Telecom Italia (TI), the parent of TIM, is said to want US$1bn from.
American Tower has also registered its interest. Another potential buyer could be SBA Communications, which has said it is looking at opportunities to bolster its stock of Brazilian towers.
The two US companies are the largest independent towercos in Brazil and both have been acquisitive in recent years.
In its Q1 results TI said there had been a high level of interest in the sites from both financial and strategic investors.
Cell Site was created in early 2013 and currently has a portfolio of almost 500 towers across Brazil. The towerco’s CEO is Ray Ward, the former head of American Tower’s Brazilian business.
Goldman Sachs and JP Morgan are not the only firms looking to capitalise on the fast-growing tower market in Brazil. In 2012 GP Investments set up BR Towers, which has subsequently amassed more than 4,000 towers.
TIM’s board gave management the green light to dispose of the towers in April in a bid to create value and improve efficiencies.
TI has said it has no intention of selling TIM Brasil itself. However, Telefonica’s investment in TI – where it controls TI’s controlling shareholder Telco – has posed a problem in Brazil.
Telefonica and TI separately own the nation’s two largest mobile operators: Vivo and TIM. The Brazilian antitrust regulator has told Telefonica that it must either reduce its stake in Telco or find a new partner to take control of Vivo, although there is not a deadline for Telefonica to abide by the ruling.
It has been speculated that TIM may be broken up and its assets distributed among rival operators. The situation does not look like it will be resolved ahead of Brazil’s planned spectrum auction, set to take place in August.
