The Milan-based carrier will keep looking at new projects “with financial rigor,” Tarak Ben Ammar said in a phone interview. “Telecom Italia will continue to look for value for its shareholders.”
Vivendi yesterday agreed to enter exclusive talks with Telefonica over the sale of GVT after the the Madrid-based phone company raised its offer to value the unit at 7.45 billion euros ($9.8 billion). Telecom Italia had offered 20 percent of its
own stock, 15 percent in an enlarged Brazil company plus cash, valuing GVT at 7 billion euros.
Telecom Italia directors voted unanimously on the GVT offer and fully back Chief Executive Officer Marco Patuano on his strategy for the Brazilian asset, Ben Ammar said. The board supported the management’s decision to avoid a higher cash offer for Vivendi (VIV)’s GVT, he said.
The cash component of Telefonica’s improved bid was 4.66 billion euros, compared with about 1.7 billion euros for Telecom Italia’s bid.
Patuano, who became CEO almost a year ago, has sold assets and scrapped the dividend as he looks for new areas of growth to rejuvenate the indebted company. Telecom Italia’s debt rating was cut to junk by Standard & Poor’s and Moody’s Investors Service last year, and the company’s net debt of about 27.4 billion euros at the end of June exceeds its market value.
Marco Patuano, Chief Executive Officer of Telecom Italia SpA.
Brazil Options
Guy Peddy, an analyst at Macquarie, said investors may now expect Telecom Italia, which controls Brazil’s second-largest mobile carrier Tim Participacoes SA (TIMP3), to become a seller of that asset after the failed GVT bid.“Their opportunities for a standalone business are clearly less,” Peddy said in a phone interview. “if it gets the right valuation, it could exit in one go. If it doesn’t get the right valuation, it could partner.”
Oi SA (OIBR4), Brazil’s fourth-biggest wireless carrier, is looking for partners to make a joint bid for Tim, people familiar with the matter said yesterday. Oi is only interested in taking a portion of its rival’s assets, the people said.
Telecom Italia, which owns 67 percent of Rio De Janeiro-based Tim, could still use the unit as a vehicle to acquire other businesses in the country, according to a person familiar with the matter, who asked not to be identified because the deliberations are private. Tim has a market value of more than $13 billion.
In a statement, Telecom Italia said it will continue to take a “disciplined approach” to its strategy in Brazil.
No comments:
Post a Comment