UPDATE 2-Brazil's TIM hires Bradesco to gauge bid for rival Oi -source

viernes 3 de octubre de 2014 16:46 GYT

(Adds comments from second source in paragraphs 4-6, adds MILAN to dateline)

By Guillermo Parra-Bernal and Danilo Masoni

SAO PAULO/MILAN Oct 3 (Reuters) - Brazil's TIM Participações SA has hired Banco Bradesco SA's investment banking unit to analyze a potential bid for rival Grupo Oi SA, a source with knowledge of the situation told Reuters on Friday.

Telecom Italia SpA, TIM's controlling shareholder, would use TIM as a vehicle to add all or part of Oi's assets in an eventual purchase, said the source, who requested anonymity because the bid is private. TIM and Bradesco declined to comment.

Bradesco acted as one of TIM's advisers in its failed bid for GVT SA, the Brazilian broadband provider acquired by Spain's Telefonica SA a few weeks ago. TIM's hiring of Bradesco was first reported by Bloomberg News on Friday.

The acquisition of Oi would allow Telecom Italia to strengthen its position in Brazil's highly competitive telecommunications market, which faces imminent consolidation efforts amid a slowing economy and declining profitability.

A second source familiar with the situation said control of Oi could allow TIM to become Brazil's No. 1 integrated telecom operator. "It's the right thing to look around, but it's easier said than done," said the source, who asked not to be identified because of the sensitivity of the issue.

Shares of TIM rose 0.2 percent to 12.50 reais in late trading on Friday. Preferred shares of Oi rose 4.5 percent to 1.63 reais.