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TSU vs. ETF Alternatives
Friday, Dec 204:18 PM
Friday, Dec 204:18 PM| Comment!
- Telecom Italia's (TI +0.7%) directors will keep their positions after shareholders rejected a proposal by dissident shareholder Marco Fossati to dismiss the company's board. 50.3% of present shareholders voted against the proposal and 42.3% for it, with 7.4% of the vote abstaining.
- The decision represents a victory for Telefonica (TEF -0.1%), who owns a 22.4% stake in TI through Telco. Bloomberg observes, "Telefonica ... has sought closer ties with Telecom Italia to take advantage of its holdings in Brazil [TIM Participacoes (TSU +1.3%)], a growing market where both carriers operate." Fossati had voiced concerns that Telefonica's interest in the Brazilian assets is incongruent with the interests of TI's other shareholders.
- Shareholders, meanwhile, also rejected the appointment of Telco-nominated directors Stefania Bariatti and Angelo Tantazzi.
Wednesday, Dec 181:15 PM
Wednesday, Dec 181:15 PM| Comment!
- Reuters reports Brazilian antitrust regulator Cade has given Telefonica (TEF +0.6%) 18 months to lower its presence in the country, either by selling its indirect stake in TIM Participacoes (TSU -0.5%) or by finding a partner for local subsidiary/#1 Brazilian mobile carrier Vivo (VIV -2.5%).
- Telefonica has been pushing Telecom Italia (TI -0.3%) to sell TIM, and so has another minority investor, BlackRock. However, the Italian telco has been loathe to pull the trigger. Sources tell Reuters Telefonica wants to split up TIM's assets between Vivo and fellow Brazilian rivals America Movil (AMX -0.1%) and Oi (OIBR -1.9%).
- A banker talking with the news service thinks Cade's lengthy timetable will result in Telefonica taking its time to unload TIM. "If I had to bet on something, I would expect them to wait until the first half of 2015." Brazil's presidential election takes place in Oct. '14, and that could bring a change in the regulatory climate.
Tuesday, Dec 1712:03 PM
Tuesday, Dec 1712:03 PM| Comment!
- Shareholders with a combined 53.8% stake in Telecom Italia (TI -0.9%) have registered to vote at the telco's Dec. 20 shareholder meeting, which will see a vote on whether to oust the board. The resolution needs 1 vote more than 50% of shareholders at the meeting to pass.
- Telco, which holds a 22.4% stake, will therefore need the backing of other investors to fend off Marco Fossati's proposal to scrap current directors.
- The fate of TI's prized TIM Participacoes (TSU +0.2%) unit may hang in the balance, with Fossati having vocalized the belief that Telco will attempt to divest the ops, leaving TI will limited growth opportunities.
- BlackRock, which has aggressively expanded its stake ahead of the shareholder meeting, has registered to vote, while proxy advisor ISS has taken Fossati's side and is estimated to represent ~9% of the vote.
Monday, Dec 29:21 AM
Monday, Dec 29:21 AM| Comment!
- Telecom Italia (TI) denies media reports that there are ongoing contacts with potential buyers for the sale of its TIM Brazil (TSU) unit: "Telecom Italia wishes to make clear that the rumors of presumed plans for the deconsolidation and/or total or partial valuation of the Brazilian asset, described and repeated by journalists, pundits and analysts are inferences wholly without foundation."
- The company once again stressed the "strategic importance" of the Brazilian ops. Speculation has swirled for some time that TI may sell the entire Brazilian unit, with some analysts seeing the Italian parent's constant rejection of the rumors as a bargaining ploy.
- A Bloomberg report last week added a new possibility to the M&A speculation, claiming that TSU has retained Morgan Stanley to divest 7K mobile towers.
- TI shares are 1.7% lighter in Milan trading.
Wednesday, Nov 271:27 PM
Wednesday, Nov 271:27 PM| 1 Comment
- Bloomberg reports Telecom Italia's (TI +0.2%) Brazilian unit (TSU -0.5%) is partnering with Morgan Stanley to find potential buyers for its 7K mobile towers, and that TI proper is "analyzing internally" how to unload its 12K Italian towers.
- American Tower (AMT -0.2%) is named as a potential bidder for the Brazilian assets, which one source thinks could fetch €700M ($951M).
- The report comes as expectations grow TI will eventually sell TSU, in which it owns a 67% stake, altogether. Major TI shareholder Telefonica wants to see a Brazilian sale, but TI has said there's currently no sales process underway.
- AMT is only two months removed from announcing a $4.8B deal to acquire major U.S. tower owner Global Tower Partners. Before that, the company struck an $811M tower purchase/lease-back agreement with NII Holdings for over 4,400 Brazilian and Mexican towers.
- Muddy Waters has been quite critical of an older Brazilian tower purchase deal carried out by AMT.
Thursday, Nov 141:25 PM
Thursday, Nov 141:25 PM| 1 Comment
- Though it recently struck a deal that increases its stake in holding company Telco (owns a 22.4% stake in Telecom Italia) and paves the way for it to assume full ownership in time, Telefonica (TEF -1.1%) chairman Cesar Alierta says his company won't exercise an option to fully take over Telco next year. Alierta expects Telco's other shareholders to keep part or all of their stakes until Feb. '15, when the company's current shareholder agreement expires.
- He also rules out a merger between Telefonica and Telecom Italia (TI -0.9%), or a merger between Telecom Italia's Brazilian unit (TSU +1.3%) and rival/Telefonica-controlled carrier Vivo (VIV +0.2%); Brazilian regulators probably wouldn't be pleased with the latter deal.
- Alierta's comments come shortly after TI announced a €1.3B convertible debt offering that apparently has Telefonica's blessing, and on a day when S&P cut TI's debt rating to junk.
Monday, Nov 115:39 PM
Wednesday, Nov 63:17 PM
Wednesday, Nov 63:17 PM| Comment!
- 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.
Wednesday, Oct 234:24 PM
Wednesday, Oct 234:24 PM| Comment!
- TIM Participacoes (TSU -1.6%) CEO Rodrigo Abreu wants Telefonica (TEF -2.7%) to stay out of decisions related to TIM. Abreu told reporters today that one solution to Telefonica's increased stake (and consequent increased board representation) in Telecom Italia (TI -1.5%) would be to extend a 2007 agreement that requires Telefonica representatives on Telecom Italia's board to refrain from voting on issues pertaining to the Brazilian ops.
- The proposal "highlights sensitive antitrust issues in Brazil, where officials have protested the idea of a merger between the country's two biggest mobile carriers, Telefonica Brasil SA and TIM," Reuters observes.
Monday, Oct 219:17 AM
Monday, Oct 219:17 AM| Comment!
- TIM Participacoes (TSU) will deploy 100G optical networking infrastructure in 3 Amazon states through their capitals, Manaus, Macapa, and Belem. TIM's plans are the second in 1 week to boost connectivity in the low-penetration region after Vivo announced planned WDM links last week.
- TIM's move precedes the 2014 FIFA World Cup, which Manaus will host.
Tuesday, Oct 1512:05 PM
Tuesday, Oct 1512:05 PM| Comment!
- Shares of TIM Participacoes (TSU -0.6%) tick down after UBS downgrades TIM to Neutral. Analyst Maria Tereza Azevedo is "skeptical on the timing of a possible TIM disposal" and expects "the status quo to prevail in the short term given numerous political, regulatory, anti-trust, and execution issues."
- TSU shares were up 12% on the month through yesterday's close due to speculation of an imminent sale or break-up, although parent Telecom Italia (TI -0.2%) stated last week that no sale process was currently ongoing.
- That said, Azevedo believes TIM has "great operating momentum, one of the strongest amongst its peers" and expects that to continue in the long term. The company is one of UBS's "top picks," but "potential downside from current levels is only enough to support a Neutral rating."
Wednesday, Oct 95:36 PM
Wednesday, Oct 92:36 PM
Wednesday, Oct 92:36 PM| Comment!
- Following a Bloomberg report indicating Telecom Italia (TI +7.8%) is looking to sell its 67% stake in Brazilian mobile carrier TIM Participacoes (TSU +6.8%) for €9B or more, the company has announced there's no sale process ongoing for the TIM stake.
- TI shares are halted. TIM has fallen a bit on the announcement, but still remains up strongly today; that suggests investors still consider a sale a matter of time.
Wednesday, Oct 91:32 PM
Wednesday, Oct 91:32 PM| Comment!
- Bloomberg reports Telecom Italia (TI +7.5%) is indeed trying to sell its 67% stake in Brazil's TIM Participacoes (TSU +6.6%), and wants at least €9B ($12.2B) for it. TI's efforts are said to be in their early stages; no banks have been hired yet.
- TI and TIM are rallying, and so is Telefonica (TEF +1.9%), which is set to own 22.4% of TI and has been pushing for a TIM sale.
- The report comes a day after Moody's cut TI's senior debt rating to junk; selling TIM would do much to shore up TI's balance sheet.
Monday, Oct 75:32 PM
Monday, Oct 75:32 PM| 1 Comment
- A source tells Bloomberg Vodafone (VOD) is uninterested in acquiring TIM Participacoes (TSU), Telecom Italia's (TI) Brazilian unit.
- There had been speculation Vodafone, set to be flush with Verizon Wireless cash, would make a bid for TIM, which TI is looking to unload following the Telefonica/Telco deal and the resignation of CEO Franco Bernabe (who wanted to hold onto Tim). AT&T is viewed as another potential acquirer.
- Meanwhile, Egyptian billionaire Naguib Sawiris, who once wanted to buy a stake in TI, now has a 1.2M-share short position in the Italian carrier. Reuters reports Sawiris believes TI will soon be hit by a credit downgrade - S&P just put the Italian carrier on watch for one - and considers it unlikely TI will be able to sell TIM before needing to raise fresh capital.
Friday, Sep 276:41 PM
Friday, Sep 276:41 PM| Comment!
- Shortly after Reuters reported Telecom Italia (TI) CEO Franco Bernabe is thinking of resigning as soon as next Thursday (Oct. 3), Bloomberg reports Bernabe plans to do it.
- A resignation could clear the way for TI to put its Brazilian unit (TSU) on the block. Telefonica (TEF), which just reached a deal to eventually take full control of holding company Telco and its 22.4% TI stake, has reportedly been pressing TI to sell its Latin American assets. Bernabe has resisted, something believed to have led Telefonica to withdraw its support for him.
- Bernabe has pushed for TI to improve its balance sheet by raising fresh capital instead, arguing "there is a lot of liquidity out there now."