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Telecom Italia denies selling TIM to TelefonicaIn a news story reported earlier by Wireless Federation, which says, Telecom Italia is intending to sell Brazil’s Fixed Line or Mobile phone unit, Spain’s Telefonica seems the potential buyer. But the recent updates from Telecom Italia, the parent company of TIM reveals that these reports have no foundation.
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Telecom Italia plans to sell the Brazilian fixed-line or mobile phone unit (Italy)Telecom Italia, the Italian incumbent, plans to sell its fixed-line network or its mobile-phone unit operating in Brazil. Telefonica Spain is looking like a potential buyer of TIM Brazil and in order to buy the unit Telefonica will have to sell off its indirect stakes in Telecom Italia.
Additionally, Telecom Italia may also consider the sale of smaller assets like Sparkle, a provider of international wholesale voice services.
STOCKWATCH Portugal Telecom lower as Sonaecom’s bid is formally registeredSharewatch writes…Portugal Telecom was down 0.03 at 10.17 eur as the PSI 20 index rose 15.72 points or 0.14 pct to 11,532.39.
Lehman Brothers said that Sonaecom’s 9.5 eur per share bid for PT is reasonable, reiterating its ‘3 Underweight’ rating. It values PT at 7.30 eur per share on a standalone basis, including a forecast 2.25 eur per share cash dividend.
“We believe the Sonaecom offer already reflects more than 2 eur of potential synergy benefits,” Lehman analysts said in a note to clients.
Lehman cites significant deterioration in Portuguese fixed line trends over recent quarters, vulnerability to access line loss driven by mobile substitution. Also, since the Portuguese mobile market already carries 65 pct of voice traffic, the upside from usage growth is more limited than for peers.
The US broker’s analysts said Brazilian mobile operator Vivo, PT and Telefonica’s joint venture in Brazil, has lost its leadership position to TIM Brazil, and trends in subscribers, revenues and EBITDA remaining weak.
Also, it says that PT’s cable network and media company PT Multimedia is trading above Lehamns fair value of 15.5 times to EBITDA.
Exane BNP Paribas said that Sonaecom’s bid is not likely to succeed at its current price after PT’s board unanimously rejected the offer, meaning that representatives of Telefonica, the largest shareholder, have voted against the offer.
Exane analysts said a large enough base of shareholders are now against the bid at the current price.
Telefonica, BES, Telmex and investor Joe Berardo, own a combined 23.5 pct of PT. Also, Caixa with 8 pct and Brandes with 5 pct are also likely against the current bid, the analysts said.
“The response document indirectly suggests that the board believes the fair value, under the Sonaecom offer, is at least 13 eur per share,” Exane said. “This is higher than our fair value of 11 eur per share (stand alone plus synergies). In any case, we believe the 9.5 price per share offered by Sonaecom undervalues PT,” the Exane analysts said.
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