UPDATE 5-Oi, America Movil, Telefonica to bid for Brazil's TIM, sources say
(Adds Telefonica Brasil comment, share performance in paragraph 11-13)
By Guillermo Parra-Bernal and Danilo Masoni
SAO PAULO/MILAN Oct 31 (Reuters) - Brazil's Grupo Oi SA, Mexico's America Movil SAB and Spain's Telefonica SA agreed to place a joint bid worth around 32 billion reais ($13 billion) for TIM Participações SA, two sources with direct knowledge of the matter said on Friday.
The companies agreed to present a single offer to minority shareholders and Telecom Italia SpA, which owns about 67 percent of TIM Participações, Brazil's No. 2 wireless carrier, said the first source, who requested anonymity as the deal is still in the works.
A bid could be presented within two weeks, both sources noted. The first source said Oi, America Movil and Telefonica are confident their offer won't meet too much resistance from antitrust and industry watchdogs in Brazil. The bid implies a 5 percent premium for controlling and minority shareholders of TIM, the first source noted.
Telecom Italia, whose board meets on Nov. 6 to examine its quarterly results, had yet to receive any offer for TIM, Chairman Giuseppe Recchi said on Friday. The Rome-based company has repeatedly said Brazil remains a strategic market, but it would consider selling TIM if a highly priced offer is made.
The bid follows a year of speculation that intense competition, stagnant sales and the rising cost of new technology would hasten consolidation efforts in Brazil's telecommunications market.
Shares of Oi posted their biggest intraday jump in six years on the news, which was first reported by Brazilian newspaper Folha de S. Paulo. TIM Participações jumped as much as 18 percent.
If the bid is successful, the three companies would then proceed to split TIM, the first source noted. Breaking up TIM would give the joint bidders more breathing room in Brazil's crowded four-way mobile market as they struggle to add customers, invest in high-speed networks and protect profits in a stagnant economy. Continuación...