Telecom Argentina Suitor Ready to Offer $1.1 Billion for Stake

  • Newbery aims to beat Fintech's $960 million offer for control
  • Italian phone company is Telecom Argentina's largest investor

Argentine businessman Carlos Newbery said he’s ready to make a fresh attempt to buy Telecom Italia SpA’s controlling stake in Telecom Argentina SA and is prepared to offer 10 percent more than the bid by Mexican financier David Martinez.

"The valuation and potential of the company is higher than what has been offered and we are ready to improve it up to $1.1 billion," Newbery said in an e-mail, responding to questions by Bloomberg News. “We have been working with our London financial advisers and have the support of Whitebridge in the U.S. and two others that I’m not at liberty to disclose right now.”

In 2013 Telecom Italia agreed to sell its Argentine business for $960 million to Fintech Advisory Inc., Martinez’s investment company. He offered about $860 million for Telecom Italia’s 22.7 percent indirect stake in Telecom Argentina and about $100 million for agreements related to the deal. The transaction hasn’t been concluded because Argentine regulators initially said Martinez wasn’t qualified to run a telecommunications company in the South American nation.

Argentina’s communications authority is expected to approve Martinez’s offer at its next meeting, four people familiar with the matter said Wednesday.

A Telecom Italia representative said Friday by e-mail that the company signed a binding agreement with Fintech in November 2013 for the acquisition of the entire controlling interest in Telecom Argentina, subject to approval by the local regulatory authorities. Under the agreement, which was amended in October 2014, Telecom Italia is required to sell to Fintech until April 2017.

In a sign that Fintech was expecting a favorable decision by the regulator, the company earlier this week announced a public tender offer for Telecom Argentina B shares it doesn’t already own at 46 pesos ($2.98) a share, according to a stock-exchange filing.

Newbery, who first expressed interest in Telecom Argentina in 2010, acknowledged that the deal with Fintech probably would be accepted. Still, he’s approached the Italian phone company about a higher bid “and we have let them know about our interest.”

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