Carlos Slim’s America Movil (AMX) expects to launch its mandatory takeover offer for Telekom Austria (TA) within two to three weeks and to secure regulatory approvals within the next four to eight weeks.
Speaking during a conference call on the…
Carlos Slim’s America Movil (AMX) expects to launch its mandatory takeover offer for Telekom Austria (TA) within two to three weeks and to secure regulatory approvals within the next four to eight weeks.
Speaking during a conference call on the Mexican telco’s first quarter results, AMX CEO Daniel Hajj said: “We are expecting the regulatory approvals to be in place anywhere in the next four weeks, eight weeks, probably”.
Hajj said the public tender offer could be outstanding “for some time”, pending regulatory approvals. He added that the company also needs to see how the capital increase at TA goes, noting that it could be done at the same time as the tender offer.
AMX and Austrian state holding OeIAG entered into a shareholders agreement last month which gives them a combined 55% stake in TA, triggering a mandatory takeover offer under Austrian law.
The Mexican telco will also offer €7.15 share for all outstanding shares.
The Austrian competition authority announced on 29 April that it had received formal notification of the deal.
As part of the agreement, AMX will support a capital increase of €1bn at TA to strengthen its financial position. AMX CFO Carlos Jose Garcia Moreno said the company expects to consolidate TA by the third quarter of this year. He stressed that the TA deal will not significantly affect AMX’s leverage, despite it taking on “a bit” more debt, or ability to engage in other M&A transactions. He said AMX has plenty of liquidity right now, partly thanks to reshuffling its investment portfolio, which has included reducing its stake slightly in Dutch telco KPN.
Moody’s said its A2 and A3 senior unsecured domestic and foreign ratings for AMX and subsidiaries remain unchanged following the signing of the shareholders pact.
“In our estimates, AMX’s leverage measured by total adjusted debt to adjusted EBITDA will not materially increase from its current 2.0x level at the end of FY 2013 as the maximum additional amount that AMX is likely to disburse as a result of this transaction is around €715m, which can be funded with the cash balance AMX currently holds,” Soummo Mukherjee, a senior credit officer with the ratings agency said.