Argentine telecoms veteran Carlos Newbery reportedly plans to outbid investment firm Fintech Advisory for Telecom Italia’s controlling stake in Telecom Argentina. Newbery, a former president of Argentine mobile operator Trixco, has been cited saying he is ready to bid up to $US1.1bn.
Argentine telecoms veteran Carlos Newbery reportedly plans to outbid investment firm Fintech Advisory for Telecom Italia’s (BIT:TIT) controlling stake in Telecom Argentina (BCBA:TECO2).
Newbery, a former president of Argentine mobile operator Trixco, said he believes the valuation and potential of Telecom Argentina is “higher than what has been offered”, adding that he is ready to bid up to $US1.1bn, Bloomberg reported.
“We have been working with our London financial advisers and have the support of Whitebridge in the US and two others that I’m not at liberty to disclose right now,” Newbery was quoted as saying.
TIM agreed to sell its 22.7% indirect stake in Telecom Argentina to Fintech, led by low-profile Mexican financier David Martínez Guzmán, in 2013 for some US$960m. Argentine regulator AFTIC blocked the deal in October 2015, saying Fintech was “not in a position to operate and take control” of the local incumbent since it has “demonstrated neither experience nor expertise”.
AFTIC, which had been seen as heavily influenced by former Argentine president Cristina Fernández de Kirchner, has been dissolved and replaced by depoliticised TMT regulator Enacom, since her party was voted out of office in late October 2015.
Enacom is expected to approve Fintech’s offer at its next meeting, according to people familiar with the matter cited in the report.
Newbury, who first showed interest in Telecom Argentina in 2010, reportedly indicated that he believes Fintech’s bid will be accepted, but added that he has let the Italian incumbent know that it is willing to make a higher offer.
Speaking during TIM’s FY 2015 results presentation earlier this month, CEO Marco Patuano said he was confident the sale to Fintech would close by year-end.
Signalling that it too is confident of a favourable outcome, Fintech made a bid last week for the 45.23% of Telecom Argentina shares listed on the Buenos Aires exchange. The offer period runs for 20 working days from 24 February and is also subject to the approval of Enacom and the national antitrust authority.
TIM agreed in November 2013 to sell a 68% stake in Sofora to Fintech – translating into an indirect 22.7% stake in Telecom Argentina – for US$960m. It sold an initial 17% stake for US$114m in December 2013.
TIM’s current 51% stake in Sofora equates to 19.3% indirect ownership of Telecom Argentina. The remainder of Sofora is owned by Fintech (17%), and local investors Grupo Werthein (32%).
Sofora owns 100% of Nortel Inversora, the investment vehicle holding 54.74% of Telecom Argentina.
Under a revised agreement signed in October 2014, TIM gained the right to terminate the pact if the second part of the deal did not complete within the 30 months ending in April 2017.
In that event, it would receive a six-month call option to buy back the original 17% stake or sell the remaining 51% to a new buyer. Fintech also provided the Italian operator with a US$631m pledge of collateral, meaning that the seller would receive the full price.
Newbery was not immediately available for comment.
