After stating its intention to bid for a majority stake in TIM Participacoes, Brazilian operator Oi is now reportedly looking for a bidding partner.
Banco BTG Pactual – which Oi has commissioned “with the purpose of enabling a viable proposal for the acquisition of the shares of TIM” – is currently holding discussions with Telefonica and America Movil. Reportedly, Oi’s offer will be predominantly cash-based.
It remains to be seen whether Telefonica will be interested in another Brazilian deal. The firm has begun exclusive negotiations with French media group Vivendi over the sale of the latter’s Brazilian fixed-line unit, GVT.
Oi’s apparent eagerness to acquire TIM Brasil is at odds with its recent asset sales, aimed at reducing debt. The group has written off almost $3 billion since April 2013 by selling infrastructure, and is currently looking to divest its interest in Angolan operator Unitel for $2 billion.
Telecom Italia has stated that it does not wish to sell TIM, describing the unit as “a strategic asset on which [Telecom Italia] is committed to concentrating important investment and growth prospects”.
Nonetheless, Oi appears keen to avoid being marginalised in Brazil’s market by larger rivals. With consolidation being brought by government conditions for infrastructure deployment and slowing market growth, Oi may be keen to participate.
However, if it goes ahead with its bid for TIM it may face competition from Vodafone. Recent speculation that the British group may be interested in a Brazilian acquisition has cited TIM as a likely candidate.