AT&T, the US telco, is prepared to tender its stake in Mexican Telmex following America Movil’s tender offer to acquire the remaining 40.04% of fixed-line operator Telmex that it does not already own. An AT&T spokesperson told TelecomFinance that it…
AT&T, the US telco, is prepared to tender its stake in Mexican Telmex following America Movil’s tender offer to acquire the remaining 40.04% of fixed-line operator Telmex that it does not already own. An AT&T spokesperson told TelecomFinance that it expects to tender its 1.525bn shares, equalling 8.5% of shares in Telmex.
AT&T has no outside adviser for the deal.
The US telco also holds a 9.2% stake in America Movil itself.
Carlos Slim’s America Movil had announced yesterday that its board approved a tender offer for Telmex, in which it holds a 59.96% stake through its subsidiary, the holding company Carso Global, already.
In a statement, America Movil said that it would be offering Ps10.50 (US$0.89) for each of the Telmex shares that it is looking to acquire. Subsequent reports quoted America Movil’s CFO, Carlos Garcia Moreno, saying that the offer is worth approximately US$6.5bn.
In its statement, America Movil said that its offer price represented a 11.1% premium over the average trading price of Telmex’s “L” shares on the Mexican stock exchange (BMV) over the last thirty days.
It added that a delisting of Telmex is planned if America Movil acquires a sufficient number of new shares. Telmex is currently listed at the BMV, NYSE, NASDAQ and the LATIBEX, an international market for Latin American securities.
The tender offer is still subject to customary conditions, including regulatory approval.
America Movil said in its statement: “With this transaction, AMX [America Movil], a competitive and strong publicly traded Mexican corporation, will be in a position to provide better conditions and more advanced telecommunication services to its customers in Mexico.”
While AT&T International holds an 8.5% stake in Telmex, the rest of the company is held by various Mexican and public investors.
America Movil’s offer comes after a difficult few months for the company in the Mexican market.
In April, the Mexican competition authorities slapped its mobile subsidiary Telcel with a US$1bn fine for alleged monopolistic practices.
In May, the government decided to deny Telmex the right to provide pay-TV, a market that the fixed-line and internet provider has been trying to break into for years.
America Movil’s subsidiaries still dominate the domestic telephone markets. According to its own figures, it has a market share of 71% in the domestic wireless market.
Last year, America Movil acquired majority stakes in Telmex International, which provides fixed-line, internet and satellite services in South America, and the holding company Carso Global.
