NII Holding‘s (NASDAQ:NIHD) agreed sale of Nextel Argentina to Grupo Clarín has failed to pass muster with the local telecom regulator.
NII Holding‘s (NASDAQ:NIHD) agreed sale of Nextel Argentina to Grupo Clarín has failed to pass muster with the local telecom regulator.
Rejecting the transaction, the Autoridad Federal de Tecnologías de la Información y las Comunicaciones (AFTIC) accused the parties of failing to seek an official go-ahead before inking the deal.
AFTIC, which according to La Nación (Clarín’s main newspaper rival), is controlled by pro-Kirchner faction La Cámpora, has ruled that the acquisition violates article 13 of Argentina’s Digital Law (Law 27,078) and threatened to cancel Nextel’s operating licence if it goes ahead with the deal. Clarín’s lawyers reportedly believe that the law provides that permission should have been sought “under the terms of the existing regulation,” but that this framework had not yet been defined.
Earlier this month, the two groups announced a strategic alliance, under which the media conglomerate had bought a 49% stake in the mobile operator, paying US$159m. Following regulatory approval, Clarín would then have had the option to buy the remaining 51% and round out the total US$178m payment.
Grupo Clarín, which has been critical of President Cristina Fernández de Kirchner, has endured a long-running battle with the government, culminating in 2014 with the company’s break-up into six parts.
NII Holdings was advised by Jones Day, but did not use a financial adviser. It had planned to use proceeds from the sale to bolster another subsidiary, Nextel Brasil, itself a rumoured takeover candidate.
Nextel, present in Argentina since 1998, is the fourth largest mobile operator with a 3% market share. The market is led by América Móvil’s Claro (33%), Telecom Argentina (32%) and Telefónica (32%).
AFTIC, NII Holdings and Grupo Clarín did not respond to requests for comment by the press deadline.
