M&A activity is heating up across Latin America as telecom carriers try (and sometimes fail) to consolidate their businesses across local and international markets.
On the more basic front, Mexican telecom tycoon Carlos Slim has launched a bid to acquire all outstanding shares of Telmex (TMX) and its immediate corporate parent, Carso Global Telecom (CGTVY.PK). Slim already controls both companies, but is laying the groundwork to fold their corporate structure into his flagship, America Movil (AMX).
At current prices, Slim is offering roughly a 30% premium on TMX and a token 1.7% bounty on CGTVY.PK.
TMX shareholders will get their choice of 0.373 AMX shares or 11.66 pesos ($0.92) per share, which translates into 0.373 ADRs of AMX or $18.40 in cash per ADR.
CGTVY.PK holders will get 1 share of AMX for every 2.0474 shares they tender, or roughly 2 ADR of AMX for every 41 thinly traded ADRs of CGTVY.PK.
Separately, things seem to be getting desperate in Brazil, where Spanish carrier Telefonica (TEF) saw its unsolicited $7.3 billion bid for full control of Vivo (VIV), the biggest local wireless company, rejected by venture partner Portugal Telecom (PT).
The bid valued VIV at roughly 240% its recent market price. If successful, Telefonica would have folded the company into its fixed-line Brazilian subsidiary Telesp (TSP)
VIV and PT are surging today; TEF is under pressure.