Connect with us

International Circuit

TIM, Vivo, Claro seek $606 mln cut in Brazil’s Oi deal price

TIM SA, Telefonica Brasil and Claro are seeking to lower price paid for rival telecom Oi SA’s mobile division by 3.2 billion reais ($605.05 million), securities filings showed on Monday.

The transaction, which concluded earlier this year, included a joint bid by TIM, America Movil’s Claro and Vivo to acquire Oi’s mobile operations at an original price of about 16 billion reais.

But post-deal analysis showed the need for an adjusted closing price, TIM said in a securities filing, citing divergences in working capital, capital expenditure and net adds data that were seen in documents available only after closing.

Under the contract agreements on price adjustments, Oi would need to repay a total 1.75 billion reais if the three buyers succeed in their deal appeal.

In a separate filing, Oi said it strongly disagreed with the request to cut the price by about a fifth, which it dubbed as based on technical and procedural errors, and that it will take measures to contest it.

The company said it might issue a formal disagreement notification within the next 30 days.

The potential post-deal price adjustment led common shares in Oi to plunge roughly 10% in morning trading.

Telefonica Brasil – which operates under the Vivo brand in the South American country – was trading near flat and Telecom Italia’s TIM dropped 1.3%. Reuters

Click to comment

You must be logged in to post a comment Login

Leave a Reply

Copyright © 2022 Communications Today

error: Content is protected !!