Telecom Argentina: An Extremely Undervalued Situation
Mark Yagalla • 12 Comments
Mark Yagalla • 12 Comments
Tue, May 10, 9:29 AM
Fri, Mar. 4, 4:30 PM
- With Vivendi (OTCPK:VIVHY -0.4%) throwing its weight around in a new strategy -- buying up shares of game makers Ubisoft and Gameloft, and of Italian communications incumbent Telecom Italia (TI +2.8%) -- the heat is on TI chief Marco Patuano to get on board the strategy that Vivendi tycoon Vincent Bollore is pursuing.
- Shares of TI are up 10.5% since Wednesday's strategy meetings between Patuano and Vivendi execs, among speculation that change is coming whether Patuano continues to lead or not.
- A 26-year veteran of the company, Patuano has increased spending on network infrastructure but has had to navigate a tricky mix of shareholders and government. Italy considers the company of strategic interest to the state, potentially complicating a move in from a French billionaire.
- Tensions were present from the time Vivendi first took its stake, and they may be intensifying as Vivendi's stake grows. Patuano struck the deal to sell off TI's control of Telecom Argentina (TEO +0.6%) and spun off its cell towers in a series of moves to address debt, but "Vivendi wants to sell Brazil" -- TIM Participaçoes (TSU +4.8%), the company's Brazilian unit -- "and Patuano does not" since he sees it as strategic, a source tells Reuters.
- Vivendi has built its stake to 23.8%, but has just four of 17 board members at present.
Fri, Feb. 26, 11:17 AM
- The slow-motion battle to acquire Telecom Argentina (TEO -0.6%) has a new wrinkle as Argentine businessman Carlos Newbery says he's ready to bid 10% more than an offer by Mexico's David Martinez.
- Telecom Italia (NYSE:TI), the owner of the Argentine telecom, agreed to sell it to Martinez's Fintech Advisory for $960M in 2013 and the deal is finally set to be approved by Argentine regulators who had opposed Martinez as unqualified to run the telecom.
- But Newbery tells Bloomberg: "The valuation and potential of the company is higher than what has been offered and we are ready to improve it up to $1.1B."
- Telecom Italia says it has a binding agreement requiring it to sell to Fintech until April 2017; meanwhile, Fintech has confidently announced a public tender for the shares of Telecom Argentina that it doesn't own at 46 pesos/share (about $2.98/share).
Thu, Feb. 11, 10:29 AM
Nov. 3, 2015, 9:24 AM
- Telecom Argentina (NYSE:TEO): Q3 Net income of P$2.8B.
- Revenue of P$28.6B (+18.2% Y/Y).
Oct. 15, 2015, 6:06 PM
- Argentine telecom regulator Aftic has rejected the bid by Fintech Group -- led by Mexican financier David Martinez -- to buy a controlling stake in Telecom Argentina (TEO -0.2%) from Telecom Italia (TI +3.5%).
- Aftic unanimously rejected the Fintech proposal on grounds that it couldn't guarantee normal functioning of a telecommunications company.
- Martinez had proposed taking a 68% stake in Sofora Telecomunicaciones, the indirect controller of Telecom Argentina. But regulators noted he had incorporated Fintech in Delaware less than a month before TI accepted his bid.
- After coming to agreement with Fintech -- effectively acquiring TI's 22.7% indirect stake in Telecom Argentina for $960M -- TI agreed to give Martinez 30 months to complete the deal, but he continued to fail at the regulatory level.
Sep. 28, 2015, 10:25 AM
- Telecom Argentina (NYSE:TEO) is off 4.9% as Goldman Sachs cuts its rating on the shares to Sell.
- The firm's Vera Rossi cut Goldman's price target to $14, from $18. Shares had closed Friday at $14.93, implying 6% downside.
- Goldman expects a decline in revenue growth and margin contraction as contract users continue to disconnect over the next few years, and the related declines in SMS and interconnection revenues that come with that (as users shift to lower-ARPU prepaid service).
- Operating expenses could continue to rise amid inflation rates over 23%, the firm notes. “We expect to see annual margin declines resume in 2016 to 23.2% (~26% in 2014/15), as inflation driven opex growth (22% in 2016) is likely to surpass revenue growth, which we see slowing to 17.2% in 2016 (from 21.4% in 2015) driven by rising disconnections and falling SMS growth.”
- It cut EPS estimates for the next two years, to $1.79 from $2.10 in 2016, and to $1.50 from $2.11 for 2017. Shares of TEO are down 26.2% YTD.
Apr. 30, 2015, 9:17 AM
- Telecom Argentina (NYSE:TEO) declares $0.4665/share quarterly dividend, 26.3% increase from prior dividend of $0.369.
- Payable May 18; for shareholders of record May 8; ex-div May 6.
Feb. 19, 2015, 2:42 PM
- Oscar Cicchetti has resigned as CEO of Telecom Argentina (NYSE:TEO) and is being called to Telecom Italia (NYSE:TI) to head up projects, likely with its wireless towers business. (translation)
- Reports had circulated toward the end of 2014 that TI was considering Elisabetta Ripa, head of TI Sparkle (international wholesale and retail business), to take over Telecom Argentina from Cicchetti.
- Cicchetti himself had assumed the role in summer 2014 from Stefano de Angelis, with the intent of wrapping up a long-planned (and delayed) sale of TI's stake in TEO.
- Shares: TEO +1.7%; TI -1.3%.
Nov. 4, 2014, 8:58 AM
- Telecom Argentina (NYSE:TEO): Q3 Net Income of Ps.2.64B
- Revenue of Ps.24.18B (+22.0% Y/Y)
Sep. 2, 2014, 2:34 AM
Aug. 1, 2014, 2:18 PM
- The International Swaps and Derivatives Association declared Argentina in default, a move which could trigger up to $1B on credit default swaps. Next up is an ISDA auction to settle outstanding CDS deals.
- Argentina bonds extended losses after the ISDA action, and the Global X Funds Argentina ETF (NYSEARCA:ARGT) is off 2.1% on the session.
- A selection of ADRs: Alto Palermo (APSA), Banco Macro (BMA -2.4%), BBVA Banco Frances (BFR -1.4%), Edenor (EDN +2.3%), Pampa Energia (PZE +0.1%), Telecom Argentina (TEO -0.6%), Tenaris (TS -0.1%), Ternium (TX -0.7%), YPF (YPF -0.9%).
Aug. 1, 2014, 6:49 AM
- Telecom Argentina (NYSE:TEO): Q2 EPADR of P$9.31.
- Revenue of P$15.59B (+22.7% Y/Y).
Nov. 7, 2013, 3:29 PM
Nov. 6, 2013, 3:17 PM
- Sources tell Reuters that Telefonica (TEF +1%), fresh off reaching a deal to eventually take full control of holding company Telco's 22.4% Telecom Italia (TI +3.2%) stake, is set to give its approval to a series of moves meant to improve TI's balance sheet.
- In addition to a sale of TI's 67%-owned Brazilian unit TIM (TSU -2%), ideas on the table are said to include a €2B ($2.7B) capital raise, a dividend cut, and the sale of TI's Argentine unit (TEO -5.1%) and Italian mobile towers.
- No imminent decision is expected regarding the sale of TIM. Brazilian regulators, opposed to selling TSU in full to a rival carrier, are reportedly coming around to the idea of allowing it to be sold piecemeal to them, rather than demanding a sale to an outside party.
- Reuters add "insiders" are concerned Telefonica will unload its TI stake once the TIM sale is finished. Telefonica has been busy trying to pare its debt load by shedding assets in slow-growing European markets, as evidenced by the recent sale of its Czech unit.
- Meanwhile, the EU has opened an antitrust investigation into the €850M sale of Telefonica's Irish unit (O2 Ireland) to rival Hutchison. A decision will be made by March 24, 2014.
Sep. 25, 2013, 1:25 PM
- At a parliamentary hearing in Rome, Telecom Italia (TI -4.8%) reiterated his opposition to a sale of the company's Brazilian and Argentine assets, at least over the near-term. Bernabe argued selling the units, responsible for 40% of TI's 2012 revenue, would hurt the carrier's international profile.
- TIM (TSU -4.8%), TI's Brazilian unit, is joining TI in selling off after rallying yesterday. A downgrade to Hold from Stifel could be contributing to the losses. Telecom Argentina (TEO +0.3%), in which TI owns an indirect 37% stake, is up slightly.
- Bernabe's remarks come a day after Telefonica (TEF +0.8%) announced a deal that could let it eventually take full control of holding company Telco and its 22.4% TI stake. Telefonica, whose Brazilian unit (VIV -2.9%) competes with TIM, is widely believed to be pushing TI to sell TIM to shore up its balance sheet and appease regulator Anatel (previous).
- Bloomberg reports Anatel would prefer TIM be sold in full rather than have its assets sold piecemeal. That could translate into a sale into a major foreign carrier such as Vodafone or AT&T, which in turn would spell tougher competition for Telefonica and fellow Brazilian carriers Oi (OIBR -9.6%), America Movil (AMX), and NII Holdings (NIHD +1.1%).
Telecom Argentina SA engages in the provision of telecommunications services. It operates through the following segments: Fixed Services, Personal Mobile Services, and Nucleo Mobile Services. The Fixed Services segment offers basic telephone services; interconnection services; data transmission... More
Industry: Diversified Communication Services
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