Tim Slumps as Telefonica Offers to Acquire GVT: Sao Paulo Mover

Tim Participacoes SA fell the most on Brazil’s benchmark stock index on speculation the mobile-phone carrier’s alternatives for expansion are shrinking after Telefonica SA offered to buy rival GVT.

Shares of Tim, Brazil’s second-biggest wireless company, tumbled 8.5 percent to 11.23 reais at the close of trading in Sao Paulo, the biggest drop since July 2012. The Ibovespa stock gauge lost 0.7 percent.

Tim gained 38 percent in the 12 months through yesterday on wagers it was a takeover target for Telefonica, which controls Vivo, Brazil’s biggest phone carrier by market share, or would merge with Vivendi SA’s Brazilian Internet-provider unit, GVT, according to Alex Pardellas, an analyst at CGD Securities.

“Now, all that hope is gone,” Pardellas said in a telephone interview from Rio de Janeiro. “It will be much more difficult for Tim to grow. Its position in the Brazilian market has weakened.”

Telefonica offered to buy GVT for 6.7 billion euros ($9 billion) to expand in a fast-growing broadband market and address antitrust concerns in the country. Telefonica Brasil SA dropped 6.6 percent today to 43.20 reais.

Tim, a subsidiary of Telecom Italia SpA based in Rio de Janeiro, had a 27 percent market share as of June, according to data compiled by the nation’s telecommunications regulator, Anatel. Vivo had a 29 percent stake, while Oi SA had 19 percent of the market.

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