Brazil's Tim Jumps as Banif Says Vivo May Buy Rival (Update2)
By Fabiola Moura
Aug. 22 (Bloomberg) -- Tim Participacoes SA, Brazil's second-biggest mobile-phone company, gained the most in six weeks in Sao Paulo trading after Banif Investimentos said Vivo Participacoes SA may be interested in acquiring its rival.
Tim's ordinary shares, which have voting rights, had the second-biggest advance on the Bovespa, rising 5.1 percent to 5.83 reais. Tim's preferred shares slipped 1.1 percent to 3.50 reais. Vivo rallied 3.6 percent to 8.08 reais.
``We believe Vivo could purchase Tim Participacoes, which would be very positive for all of the Tim and Vivo shares,'' Banif analyst Alex Pardellas wrote in a report.
Both Tim and Vivo reported losses in the second quarter, hurt by rising competition in Latin America's biggest economy. Yesterday, the Brazilian telecommunications agency reported Vivo and Tim's share of the mobile-phone market declined in July, while the number of subscribers increased.
``Competition is very strong in the mobile phone market,'' Pardellas said in an interview. ``The Brazilian wireless sector will consolidate in the future.''
Rio de Janeiro-Based Tim reported a net loss of 34.1 million reais in the second quarter, compared with a 34 million reais profit a year earlier.
``We maintain our cautious view on Brazilian mobile, despite strong subscriber growth prospects'' as interconnection cuts may prevent ``significant'' higher margins and competition will intensify, JPMorgan Chase & Co. analysts led by Andre Baggio wrote in a note yesterday.
``The rumors circulating in the market lack any fundamentals,'' according to a Tim statement emailed to Bloomberg. Sao Paulo-based Vivo, the largest mobile-phone company, didn't return a call from Bloomberg News to its Sao Paulo press office seeking comment.
Wider Spreads
The spread between Tim's nonvoting and voting shares has widened the most since September 2007, indicating a possible change in control, Pardellas wrote.
``As yet, we have not heard any rumor on a change in control.'' Sao Paulo-based Banif is a unit of Portugal's fourth- largest publicly traded bank.
A merger may raise regulatory concerns as Tim and Vivo control 55.51 percent of the market, according to data released by the telecommunications regulator Anatel.
Tim and Vivo are among four companies being investigated by the Justice Ministry's antitrust unit for allegedly stifling industry competition.
To contact the reporter on this story: Fabiola Moura in New York at fdemoura@bloomberg.net
Last Updated: August 22, 2008 17:35 EDT |
