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Telecom Italia puts Argentina deal back on the table

Telecom Italia has stated that it will resume negotiations with Fintech over the sale of its stake in Telecom Argentina.

Discussions have been ongoing since November 2013, although recently it seemed as though the deal could be shelved due to numerous regulatory delays.

However, it now seems that the parties will “evaluate and define” potential amendments to the process, since the sale agreement they signed last year is still valid until October 24th this year. The two parties will attempt to introduce measures that address the regulatory delays, which will involve guarantees for Telecom Italia.

As Telecom Italia looks to set out the deal conditions, other firms have expressed interest in taking over the Italian incumbent itself. Egyptian telecom tycoon Naguib Sawiris recently reconfirmed an interest in the firm, after first expressing this sentiment back in 2012.

However, Sawiris is believed to be planning a bid of around $2.5 billion – significantly below the $9.6 billion that former Telstra head Sol Trujillo is reportedly considering. The one-time head of the Australian incumbent is believed to be discussing the bid to assume control over TI with investors.

Telefonica’s announcement that it will divest its holding in the Italian incumbent is reportedly a major factor behind Sawiris’ renewed interest in TI, which has become something of a takeover target due to its fragmented shareholder base. Numerous Italian financial houses are tabling their stakes in TI.

The numerous delays that have plagued the Telecom Argentina deal are not the only issue faced by TI in Latin America – the operator has also lost out on opportunities for consolidation in Brazil, its other major foreign market. The operator had hoped to merge its TIM Brasil unit with cable firm GVT, but its offer was rejected by GVT owner Vivendi in favour of its rival Telefonica’s bid.

While a deal between TI and Brazilian operator Oi has been suggested, thus far nothing concrete has been established. A merger would be beneficial to both parties in allowing bundled fixed and mobile services.

 

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