Nov. 15 (Bloomberg) -- Billionaire Carlos Slim's Telefonos de Mexico SAB, the largest fixed-line telephone carrier in Mexico, rose the most in seven years on a plan to spin off its faster- growing operations elsewhere in Latin America.

The shares rose 1.28 pesos, or 6.9 percent, to 19.77 pesos in Mexico City, the most since July 3, 2000.

Slim, 67, is giving investors a chance to bet on a new company with units in Brazil, Colombia, Argentina, Chile, Ecuador and Peru as sales growth in Mexico stalls. The spinoff plan mimics the 2000 deal that turned Telmex's mobile-phone unit into America Movil SAB. Today, America Movil's $105 billion market value is about three times Telmex's.

``Separately the companies are worth more than Telmex now,'' said Gerardo Lozoya, a partner at Investra Consultores SA, which manages about $750 million in Monterrey, Mexico. ``The international part is small and it was hard for investors to figure out what the strategy was.''

Citigroup Inc. analyst Patrick Grenham upgraded shares to ``buy'' from ``hold.'' UBS analyst Carlos Sequeira upgraded shares to ``neutral'' from ``sell.''

The new company, called Telmex International, will trade in Mexico and the U.S. The split requires shareholder and regulator approval, Telmex said.

ADRs Jump

The American depositary receipts of the new company may be be worth from $8 to $10 each, with Telmex ADRs worth $28 to $26 after the spinoff, Grenham wrote. Telmex American depositary receipts rose 6.7 percent to $36.11 in New York.

In Mexico, where Telmex has 90 percent of the nation's lines and gets 80 percent of profit, sales growth has stalled since 2001. Mexican regulators plan to start a probe by the end of 2007 to identify markets where Telmex's market share is large enough that special regulation may be needed to encourage competition.

The spinoff may insulate the non-Mexican part of the business from increasing antitrust pressure, wrote Manuel Jimenez Zaldivar, an analyst at IXE Grupo Financiero SA in Mexico City.

Telmex said yesterday details on how many shares of Telmex International its existing shareholders will get will be announced at a later date it didn't specify.

``The intention of this spinoff was to show the value of the international operations,'' analyst Martin Lara of Vector Casa de Bolsa wrote in a report e-mailed today.

Carso Global Telecom SAB, the holding company for Telmex, gained 4 percent to 47.26 pesos. The holding company is one of the largest beneficiaries of the spinoff as the value of its Telmex shares increases, wrote analyst Manuel Jimenez Zaldivar of IXE Grupo Financiero in a research note e-mailed today

Embratel Participacoes SA, the Brazilian unit that would become the largest part of the new international company, today launched a $500 million satellite to bolster its telephone, television and Internet services, Telmex said in a statement.

To contact the reporters on this story: William Freebairn in Mexico City wfreebairn@bloomberg.netAdriana Arai in Mexico City at aarai1@bloomberg.net

Last Updated: November 15, 2007 16:43 EST