Brazil’s Oi and the parent companies of its rival operators, America Movil (AMX) and Telefonica, have reportedly agreed to make a joint bid to acquire and break up TIM Brasil, the country’s second-largest player.
The three operators are looking to…
Brazil’s Oi and the parent companies of its rival operators, America Movil (AMX) and Telefonica, have reportedly agreed to make a joint bid to acquire and break up TIM Brasil, the country’s second-largest player.
The three operators are looking to pay R$31.5bn (US$13.1bn) for Telecom Italia’s (TI) Brazilian unit, although the offer has not yet been finalised, according to an unsourced report in Brazilian newspaper Folha de S. Paulo.
The price would reportedly include a 5% premium payout to TIM’s shareholders.
Oi’s adviser, BTG Pactual, is working with the consortium, which is reportedly due to present a formal offer to TI’s shareholders.
As part of the deal, AMX, which owns Claro in Brazil, would acquire 40% of TIM while Telefonica, which controls number one player Vivo, would hold 32%. Oi would take the remaining 28% stake.
In response to a separate local media report, Oi confirmed in a statement today that BTG Pactual has held talks with third parties, including AMX, to discuss a potential joint bid for TIM.
It however said there has been no agreement regarding the deal’s structure and that no proposals to enter into a transaction have been signed.
TIM issued a statement in response to the Folha report saying that TI was not aware of or involved in any discussions regarding a potential sale of the Brazilian operator, and had no information regarding the content of such discussions between Claro’s, Vivo’s and Oi’s shareholders.
Separately, TI chairman Giuseppe Recchi was reported by Reuters as saying that the company had not received any offer for its Brazilian operations.
Telefonica was reportedly in talks about breaking up TIm in recent days, according to a Reuters report citing a source familiar with the situation. The Spanish telco said on various occasions that it was currently focused on integrating Brazilian broadband operator GVT, which it acquired in August from Vivendi outbidding TI, into its operations.
According to the Brazilian report, the submission of an offer for TIM is conditional to the sale of Oi’s Portuguese operations, Portugal Telecom (PT) which, according to multiple local reports, is due to be agreed next week.
Current suitors for PT reportedly include Luxembourg-based holding Altice, along with private equity firms Bain Capital, CVC Capital and Apax Partners.
Today, in an interview with Portuguese newspaper Diario Economico, Altice president Dexter Goei was reported as saying that the company will bid for PT “very soon” and that the acquisition could be worth 15-20% of the group’s turnover.
Proceeds from PT sale would enable highly-leveraged Oi to reduce its R$46.2bn (US$19bn) debt and give it much-needed cash for a TIM bid.
America Movil declined to comment, while Telefonica could not be immediately reached for comment.
