Bloomberg News

Vodafone Is Said to Decide Against Bid for Tim Participacoes

October 07, 2013

Vodafone Is Said to Decide Against Bid for Tim Participacoes

A Tim Participacoes SA retail store in the Ipanema neighborhood of Rio de Janeiro, Brazil, on Aug. 6, 2013. Tim Participacoes SA, Brazil’s best-performing telecommunications stock this year, is gaining market share by undercutting rivals on voice and data plans. Photographer: Lianne Milton/Bloomberg

Vodafone Group Plc (VOD) isn’t interested in bidding for Brazil’s Tim Participacoes SA (TIMP3), a person with direct knowledge of the company said, refuting speculation that the U.K. carrier might make an offer.

Vodafone has no plans to buy a Tim stake and isn’t holding talks with the company’s owner, Telecom Italia SpA (TIT), said the person, who asked not to be identified because the deliberations are private. Analysts at BTIG LLC and Brandes Investment Partners have cited Vodafone as a potential suitor for Tim, Brazil’s second-biggest wireless carrier.

Telecom Italia’s financial troubles and management changes have fueled speculation that the company will put Tim on the block. Chief Executive Officer Franco Bernabe, who opposed the idea of selling Tim, resigned from the Italian company last week following a dispute over strategy with shareholders. Another option for Tim would be to divide its assets and subscribers among its Brazilian rivals, according to Barclays Plc.

Vodafone, meanwhile, stands to get $130 billion from the sale of its stake in Verizon Wireless, giving it a windfall to use for potential deals. The Newbury, England-based company declined to comment on any acquisition plans, as did a spokesman for Telecom Italia.

Telecom Italia fell 1.7 percent to 63 euro cents at the close in Milan, where the company is based. The shares have slid 8.1 percent this year. Vodafone closed down 1.2 percent to 218.80 pence in London. Tim rose 0.1 percent to 11 reais at 4:19 p.m. in Sao Paulo.

‘Evenly Split’

Brazilian regulator Anatel is unlikely to approve an outright merger of Rio de Janeiro-based Tim with a single large competitor, Barclays analysts led by Jonathan Dann said in a Sept. 16 report.

Brazil’s market “is pretty evenly split” among four main operators, Richard Dineen, a New York-based HSBC Holdings Plc analyst, said by telephone on Sept. 19.

“Combinations of any of the top four players start to create concentration problems,” Dineen said.

Brazilian carriers face regulatory pressure to keep investing in services such as public phones, and can be assessed millions of reais in fines if they fail to provide good service. Revenue is dropping as the companies compete for share in a market that’s no longer growing, and as interconnection fees decline.

To contact the reporter on this story: Patricia Laya in Madrid at playa2@bloomberg.net

To contact the editor responsible for this story: Nick Turner at nturner7@bloomberg.net


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