Telecom Italia SpA’s Brazil unit is considering making a bid for the country’s fifth-largest mobile phone carrier, Nextel Telecomunicacoes Ltda., to boost its market share and gain spectrum in some metropolitan areas, people familiar with the matter said.
Telecom Italia Chief Executive Officer Amos Genish is considering discussing the possible deal for Nextel, which would be made through Tim Participacoes SA, at the European carrier’s planned board meeting Sept. 24, according to the people. The company may hire advisers to explore a potential offer if the board approves, the people said, asking not to be identified because the information is private.
The Brazilian business had 3.2 million subscribers at the end of last year and reported an adjusted operating loss before depreciation and amortization of $31 million.
Genish, a veteran telecom executive who spent several years in Brazil, also plans to discuss some possible asset sales at the board meeting, the people said. Potential divestments under consideration include the company’s wholesale arm Sparkle and media unit Persidera, as well as a partial stake in its listed wireless tower unit Inwit SpA, according to the people.
Representatives for Telecom Italia, Tim Participacoes and Nextel weren’t available for a comment outside business hours.
Telecom Italia is in a middle of a fight between its two largest investors, the French media conglomerate Vivendi SA and U.S.-based activist investor Elliott Management Corp. Genish has spent almost a year trying to right the ailing carrier, which has not paid a dividend on its ordinary shares since 2013.
Nextel is the Brazilian unit of New York-listed NII Holdings Inc., which has soared on bets its deal prospects have improved. NII’s stock surged about 900 percent this year through Wednesday.
NII hired Rothschild to advise on the sale of its 70 percent stake in Nextel Telecomunicacoes, Reuters reported in June, citing unidentified people.
Source: Bloomberg.com