TI’s Argentina stake draws interest

25 Jun 2009

Five companies have expressed an interest in acquiring Telecom Italia’s (TI’s) 50% in Sofora, the holding company that controls Argentine telco Telecom Argentina, writes BNamericas, citing local newspaper Perfil. The Italian company is looking to divest its stake in Sofora due to an ongoing antitrust investigation which has blocked the company’s ability to exercise a call option to take control of the holding company. Three Argentine groups, Grupo America, Grupo Clarin and Grupo Roman, and two foreign investors, Mexican billionaire Carlos Slim, who owns mobile company America Movil, and Brazilian group Andrade Gutierrez, have reportedly been contacted by Credit Suisse, the firm hired to evaluate the sale of the stake. The report also says that interested parties have until 3 July to make an offer on the stake, which could be worth between USD400 million-USD700 million.

In a separate report, Reuters writes that Argentina’s Werthein Group, which owns the other 50% in Sofora, has said that it is also thinking about buying the other half in the holding company.

Telecom Italia is considering selling its stake due to a decision by Argentina’s antitrust agency, the National Commission for the Defense of Competition (CNDC), in early April 2009 barring TI from making decisions regarding its Argentine unit and the suspension of the annual shareholders meeting of Telecom Argentina and the directors’ meeting of Sofora. 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 Werthein Group to increase its stake in Sofora. The CNDC has barred TI from exercising its call option on Werthein Group’s Sofora shares, which vested at the end of 2008.

Argentina, Sofora, Telecom Argentina (incl. Cablevision), Telecom Italia (TIM)