Bloomberg: Telecom Italia Seeks 13 Bln Euros For Tim Participacoes Stake

(RTTNews) - Italian phone carrier Telecom Italia SpA (TI, TIAOF) looking to exit its majority stake in its Brazilian unit Tim Participacoes SA (TSU) after it lost out last week to Spanish telecom operator Telefonica S.A. (TDE.L, TEF) in a bidding war to acquire Paris-based Vivendi S.A.'s (VIV.L, VIVEF) Brazilian broadband unit Global Village Telecom, S.A. (GVT), according to a Bloomberg report on Tuesday.

Telecom Italia is reportedly looking at a price point of at least 13 billion euros or $16.8 billion, for the majority stake on 67 percent it holds in Brazilian mobile-phone operator Tim Participacoes. The pricing will give Tim a total enterprise value of about 20 billion euros, which represents a 73 percent premium over its value on Monday in Sao Paulo.

Brazil's second-largest mobile-phone carrier Tim Participacoes is said to have attracted interest of Brazalian wireless carrier Oi SA (OIBR) and billionaire Carlos Slim-controlled Mexican telecom giant America Movil S.A.B. De C.V. (AMX, AMOV), who are considering a joint bid for Tim. Rio de Janeiro-based Oi competes with Tim in Brazil.

América Móvil's unit Claro already has about 25 percent market share in the Brazilian mobile market. According to reports, Oi is also seeking to draft Telefonica, Brazil's biggest wireless company, into the joint bid for Tim.

Apart from seeking to exit Brazil, another option for Telecom Italia is to seek a partnership for Tim Participacoes with Oi SA or other operators in the market and speeding up investment in Brazil to improve its mobile and broadband networks.

Meanwhile, Vivendi has already entered into three-month exclusive talks with Telefonica until November 28 to close the sale of GVT. Telefónica currently expects to sign a deal in November and close the acquisition in mid-2015.

Internet-access provider GVT is a successful and fast growing alternative operator in Brazil. The two telecom giants are vying for GVT in a bid to add broadband offering in Latin America's largest market as phone-service revenue drops in Spain and Italy amid intense competition.

A combination of Madrid-based Telefonica's commercial brand in Brazil, Vivo, and GVT is billed to create the largest telecom operator in Brazil's phone market. GVT has an 11.4 percent share of Brazil's broadband market, compared to Telefónica's 19.4 percent share.

Telecom Italia is looking to exit Brazil by selling Tim Participacoes as the loss of the deal will leave it in a much weaker position in Brazil compared to a stronger Telefonica. The two companies are already one of the biggest rivals in the Brazilian phone market, with Tim Participacoes competing currently with Vivo.

In Tuesday's regular trading session, Telecom Italia is trading in Milan at 0.92 euros, up 0.03 euros or 3.27% on a volume of 156.09 million shares, and Tim Participacoes is trading in Sao Paulo at 13.62 real, up 0.34 real or 2.56% on a volume of 3.38 million shares.