Telecom Italia (TI) is reportedly looking to divest its 50% stake in Sofora Telecommunications, the holding company which controls Telecom Argentina, due to an ongoing antitrust investigation which has blocked the company’s ability to exercise a call option to take control of Sofora. A person close to the situation told Dow Jones Newswires that the Italian telecoms giant has hired Credit Suisse First Boston to help it put together the sale of its stake in its Argentine unit. Meanwhile, local daily La Nacion reported that two local companies, Grupo Clarin and a partnership between prominent local businessmen Eduardo Eurnekian and Ernesto Gutierrez, have expressed an interest in buying the stake.
The announcement follows a decision by Argentina’s antitrust agency, the National Commission for the Defense of Competition (CNDC), in early April barring TI from making decisions regarding its Argentina unit and the suspension of the annual shareholders meeting of Telecom Argentina and the directors’ meeting of Sofora. The assemblies will be held off until the CNDC makes a final ruling on a perceived conflict of interest caused by Telefonica of Spain’s indirect ownership in TI. In November 2008 Argentina ruled that Telefonica’s 24.7% stake in TI, bought in October 2007, violates Argentinean anti-trust laws. When Argentina’s telecoms sector was privatised in the 1990s its fixed line services were divided between Telecom Argentina and Telefonica de Argentina, with a government directive stating that there should be no cross-ownership between the two. TI has also been locked in a lengthy battle with Sofora’s other shareholder, local firm Werthein Group, to increase its stake in the holding company. The CNDC has barred TI from exercising its call option on Werthein Group’s Sofora shares, which vested at the end of 2008.