America Movil (AMX) shareholders have approved a tower spin-off, aimed at complying with Mexico’s new telecoms regulations.
Around 98.2% of shareholders voted in favour of the plan to transfer 10,800 passive masts to a newco called Telesites, which…
America Movil (AMX) shareholders have approved a tower spin-off, aimed at complying with Mexico’s new telecoms regulations.
Around 98.2% of shareholders voted in favour of the plan to transfer 10,800 passive masts to a newco called Telesites, which will list on the local stock exchange.
America Movil shareholders will receive one Telesites share for each of their existing shares.
AMX will shift Ps20.6bn (US$1.3bn) of debt into Telesites, initially in the form of a loan from AMX. It will also move Ps2bn(US$130m) of cash into the tower company.
In the last year, the Carlos Slim-owned incumbent, which controls 70% of the mobile market and 80% of the fixed-line segment, has faced significant pressure from telecoms regulator the IFT to divest assets and share network infrastructure, in a bid to foster competition and attract foreign investments.
Last month, the telco inked MVNO deals with local fixed-line operator Axtel and Telecomunicaciones 360, a unit of retail business Grupo Elektra.
Possible takeover target
Telesites is an underutilized asset in an attractive market in which infrastructure deployment will likely accelerate with new entrant AT&T [which acquired Iusacell and agreed to buy Nextel Mexico]. It could become a target for US tower companies, said Soomit Datta, LatAm analyst at New Street Research.
“Although Carlos Slim opted for a tower spin-off rather than a sale, we believe that in the medium term Telesites will inevitably be an acquisition target for US tower companies. In the event AT&T fails to live up to its billing as the next tenant, helping to drive co-location levels higher, this represents a backstop on valuation given the assets would likely be monetized at a market rate,” Datta said.
