Local tycoon Newbery seeks to hijack Telecom Argentina sale

1 Mar 2016

Argentine businessman Carlos Newbery says he is poised to make an offer to buy Telecom Italia (TIM’s) controlling stake in Telecom Argentina, and is prepared to offer 10% more than the existing bid by Mexican financier David Martinez. Newbery told Bloomberg last week: ‘The valuation and potential of the company is higher than what has been offered and we are ready to improve it up to USD1.1 billion … We have been working with our London financial advisers and have the support of Whitebridge in the US and two others that I’m not at liberty to disclose right now’. According to his LinkedIn profile, Newbery is a veteran of the Argentinean telecoms sector; he co-founded Movicom Bell South in Argentina and Uruguay, in conjunction with the Baridon Group, and went on to partner with Bell South to construct cellular networks in Peru, Ecuador, Brazil, Bolivia and Chile. In the late 1990s, Newbery became the director of Hutchinson Telecommunications Argentina.

In November 2013 TIM announced that it had sold its original 68% stake in Nortel Inversora – the controlling shareholder of Telecom Argentina – to Martinez-owned Fintech for USD960 million. An initial 17% stake (valued at USD215.7 million) was transferred to Fintech in October 2014, but the wider deal ran into trouble a year later when the Federal ICT Authority (Autoridad Federal de Tecnologias de la Informacion y las Comunicaciones, AFTIC) blocked the sale, claiming that Fintech has not demonstrated sufficient experience and expertise to take control of Telecom Argentina’s infrastructure.

TeleGeography’s GlobalComms Database notes that Telecom Argentina is currently 54.74%-owned by Nortel Inversora, while 45.23% of the company was in free float on the Buenos Aires and New York stock exchanges. The remaining 0.03% stake is designated as ‘Class C shares’. Nortel Inversora is itself controlled by Sofora Telecomunicaciones, a joint venture between TIM (51%), Grupo Werthein de Argentina (32%) and investment firm Grupo Fintech (17%).

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