Oi Jumps on Report LetterOne May Invest Without Tim Dealby and
Russian fund would lift condition of Oi merger, Valor reports
As negotiations with Tim stall, LetterOne said to review offer
Oi SA climbed to its highest intraday price of the year on a report that Russian billionaire Mikhail Fridman’s LetterOne may review its proposal and offer to inject cash into the Brazilian phone company without first requiring it to merge with rival Tim Participacoes SA.
Oi shares rose 5.6 percent to 1.90 reais at 4:27 p.m. in Sao Paulo, after touching 2.01 reais earlier Wednesday, the highest since Dec. 30.
LetterOne offered last year to inject as much as $4 billion into Oi, conditioned upon its merger with Brazil’s second-largest wireless provider Tim, which is controlled by Telecom Italia SpA. As the negotiations stall, LetterOne may now agree to invest in Oi, the country’s fourth-largest wireless carrier, without the condition of a possible merger, Valor Economico newspaper said Wednesday, citing people close to negotiations it didn’t identify.
Stuart Bruseth, a spokesman for LetterOne in London, declined to comment on the story, as did Oi’s press office. LetterOne managing partner Alexey Reznikovich said in November that the company may still invest in Oi, even if the Tim merger doesn’t pan out.
Telecom Italia is working on a cost-cutting plan for Tim that will include the reduction of about 1,000 white-collar positions, about 8 percent of its workforce, people familiar with the matter have said. The company on Tuesday confirmed its previous 14 billion reais ($3.5 billion) investment plan for Brazil.