América Móvil buys 93% of PRT for USD1.64 billion

20 Jul 2006

The Puerto Rican government has accepted a USD500 million offer from Mexican mobile group América Móvil (AM) for its 28% stake in the country’s largest telco Puerto Rico Telephone Company (PRT), reports BNamericas quoting state development bank BGF. PRT’s majority owner, US-based Verizon Communications, recently agreed to sell its 52% stake to AM for USD939 million, as part of a USD3.7 billion deal in which it will also sell its 29% stake in Venezuela’s CANTV for USD677 million (to AM and sister company Telmex) and 100% of Dominican Republic operator Verizon Dominicana for USD2.06 billion. The transaction is expected to be completed by the end of 2006. Puerto Rico’s government has agreed to the same conditions as the Verizon sale, and Puerto Rican bank Banco Popular has also taken an option to tag along with the deal and sell its 13% holding in PRT to AM for USD199 million, bringing the total price for AM’s 93% stake purchase to USD1.638 billion; the remaining 7% of PRT is owned by its employees. The ownership change is dependant on an anti-monopoly verdict by the FCC, as Puerto Rico falls under the jurisdiction of the US telecoms regulator.

BNamericas reports that PRT’s shares have not performed well since 1999 and the government hopes to use the USD500 million to invest in better options aimed at paying the pensions of state employees. TeleGeography’s GlobalComms database records that PRT, also known as Telpri, had 1.11 million fixed line subscribers at the end of 2005 and its mobile arm Verizon Wireless Puerto Rico had 503,000 users at the end of March 2006.