Boston, MA 09/02/2014 (wallstreetpr) – A lot of people questioned when Telefonica S.A. (ADR) (NYSE:TEF) decided to sell the shares of its Brazilian plant to finance the acquisition transaction of broadband provider GVT. The total cost of this acquisition is around 7.45 billion-euro ($9.8 billion). Although the company’s decision to sell its Brazilian plant stocks has resulted into excess of cash that will help the company in other transactions as well.
What Market Experts Think About It:
According to data compiled by the Bloomberg, the net debt of the division is around 0.3 times earnings after selling new Telefonica S.A. (ADR) (NYSE:TEF) Brazil stocks to fund the 4.66 billion-euro cash portion of the acquisition transaction. As per the inputs shared by Walt Piecyk, analyst at BTIG LLC in New York, at this level TFE could easily borrow more money to acquire new assets. The agreement done by Vivendi in the previous week in order to sell GVT to Telefonica S.A. (ADR) (NYSE:TEF) may increase the consolidation because the four top-notched wireless carriers try to cope up with a slow market conditions.
As per the information given by the people close to this matter, Oi SA and Banco BTG Pactual SA is working together to get the Carlos Slim’s America Movil SAB and TFE to form a team with Tim Participacoes SA (TIMP3) on cash offer. This company is controlled by Telecom Italia SpA (TIT). Although those who revealed this information denied to disclose their names as it is a private matter,.
Telefonica S.A. (ADR) (NYSE:TEF) has given a clear indication that extra cash is to take part in any attractive sale transaction of Tim in coming time. If America Movil, TFE and Oi made a $17.8 billion bid for Tim at 31% premium to its current market value, then TFE’s acquisition share would cost 13.3 billion. The information was revealed by Paul Marsch, Analyst at Berenberg Bank.
