Brazil Telecom TIM Shares Fall As Telecom Italia Rejects Offers
SAO PAULO -(Dow Jones)- Shares in Brazil's No. 2 mobile telephone TIM Participacoes fell sharply Friday on news that Telecom Italia has rejected all offers received for the Brazilian company.
At 1915 GMT, TIM preferred shares were 3.1% lower at 6.87 Brazilian reals ($3.29), while common shares were 4.4% lower at BRL11.18. The Ibovespa index was 0.1% lower.
Telecom Italia said in November it was studying unsolicited bids for its Brazilian unit but later put the brakes on a possible sale.
"TIM shares lose appeal in the short term because the decision rules out a mandatory share offer," said Luciana Leocadio, telecom analyst at the Ativa brokerage firm in Rio de Janeiro.
Telecom Italia's decision will have a negative impact on shares linked to Brazilian telecoms in general, analysts said. The rejection means there will remain four major operators in most Brazilian regions, implying a high level of competition and low level of margins. In most countries, there are no more than three players in main regions.
"The news frustrates some industry consolidation hopes," said Jacqueline Lison of the local Fatorage brokerage firm.
Spain's Telefonica, which is part owner of Brazilian mobile market leader Vivo Participacoes, was seen as a frontrunner to buy TIM. Press reports indicated that Mexico's America Movil, which owns No. 3 operator Claro, may also have been interested.
-By Alastair Stewart, Dow Jones Newswires; 5511-3145-1479; brazil@dowjones.com
(END) Dow Jones Newswires"
Posted to the site on 16th February 2007
