Telefonica’s Brazil Stock Sale Means More Room for Purchases

Telefonica SA’s plan to sell shares in its Brazilian unit to finance the bulk of the 7.45 billion-euro ($9.8 billion) acquisition of broadband provider GVT keeps the Spanish carrier’s financing options open for further deals.

By selling new Telefonica Brasil SA stock to fund the 4.66 billion-euro cash portion of the transaction, Telefonica will leave the division’s net debt steady at about 0.3 times earnings, according to data compiled by Bloomberg. At that level, Telefonica Brasil could borrow money to acquire more assets, said Walt Piecyk, an analyst at BTIG LLC in New York.