UPDATE 1-TIM Brasil CEO says any sale to rivals would involve high price

miércoles 10 de septiembre de 2014 13:00 GYT
 

(Rewrites throughout to add comments from TIM Brasil CEO, background, share performance)

By Leonardo Goy and Guillermo Parra-Bernal

BRASILIA/SAO PAULO, Sept 10 (Reuters) - A potential sale of TIM Participações SA to rivals would involve extraordinary price valuations for Brazil's second-largest wireless carrier, Chief Executive Officer Rodrigo Abreu said on Wednesday.

Controlling shareholder Telecom Italia SpA has yet to propose or inform the price it is seeking for TIM Participações, commonly known as TIM Brasil, Abreu told reporters in Brasilia. TIM Brasil will evaluate any potential takeover bids, Abreu said.

"If there's any proposal ... you have to do an analysis based on the expectations that the company's strategic importance and growth potential are so big ... that there would never be a discussion if a sale involved traditional market valuation metrics," Abreu said.

The prospect of a sale of TIM Brasil developed in recent months but grew during the past two weeks after Telecom Italia lost out to Telefonica in the bidding for smaller phone and data provider GVT SA, denying TIM Brasil and its Italian parent a new avenue of growth in Brazil.

Abreu's comments suggest that TIM Brasil and parent company Telecom Italia will only sell at a very high price. Brazil's telecommunications market is undergoing a wave of consolidation, with TIM Brasil's rivals seeking to split up the company as Telefonica SA snaps up GVT SA.

Shares of TIM Brasil shed 1.8 percent to 13.32 reais in São Paulo. Telecom Italia rose 0.6 percent to 0.9190 euros in Milan.

Breaking up TIM would give rivals more breathing room in Brazil's crowded four-way mobile market, where they have struggled to add customers, invest in high-speed networks and protect profits in a stagnant economy.   Continuación...