TIM Gets An Unexpected Catalyst: Sale To The Liking Of Authorities, 40% Upside
- Telecom Italia, which has been experiencing financial problems, holds a 67% stake in TIM, the second-largest Brazilian telecommunications company.
- TIM is having a good performance, especially when compared to its peers, and its value may increase accordingly.
- Telefonica dominates the management of Telecom Italia; considering that it also owns VIVO, leader of the Brazilian market, Anatel wants a quick solution in terms of market consolidation.
- TIM shareholders are in a winning position. While there is the option of joining with GVT, the most likely outcome is the sale and division of assets by its rivals.
- If Telecom Italia agrees to sell all of TIM's assets in parts to its peer group, share prices will tend to rise consistently. Valuation of ~$16B leads to 40% upside.