US incumbent AT&T has sold off shares worth US$564m of its stake in Mexican colossus America Movil.
As a result of the disposals, which took place throughout the last month, AT&T’s stake in the Carlos Slim-controlled telco was reduced to 9%.
In an…
US incumbent AT&T has sold off shares worth US$564m of its stake in Mexican colossus America Movil.
As a result of the disposals, which took place throughout the last month, AT&T’s stake in the Carlos Slim-controlled telco was reduced to 9%.
In an SEC filing it said it sold 540 million shares. However the US operator has indicated that this is not the start of an exit from the Mexico City-based incumbent. Rather, the measure was taken to bring down its stake in AMX to previous levels.
“We’ve historically owned about 9% of AMX,” AT&T said in a statement. “As a result of AMX’s recent share repurchases and our sales, we will again hold an approximate 9% interest in AMX.”
BTIG Research analyst Walter Piecyk does not expect AT&T to sell any more shares in AMX, nor does he expect it to give up its seats on the board.
“While America Movil’s US subsidiary (Tracfone, an MVNO) has been shifting wholesale minutes and data usage to Verizon, we still think the companies have a positive relationship,” Piecyk said in a note.
AT&T CEO Randall Stephenson worked with Slim in the 1990s at Telefonos de Mexico and the two are reported to be friends.
AT&T is the second largest shareholder in AMX behind Slim. Two AT&T employees sit on AMX’s board: Jeffery McElfresh, president of AT&T Mexico, and Michael Viola, AT&T’s senior vice president of corporate finance.
The dominant Mexican player has a market cap of US$72.5bn and AT&T’s stake within that is worth roughly US$6.5bn.
AMX’s share price has dropped almost 16% since the start of the year, in part due to a regulatory clampdown in Mexico which threatens it stranglehold on wireless, where it has 70% market share, and fixed-line, where it dominates with 80%.
