By Daniel Flynn
MADRID (Reuters) - Spain's Telefonica said on Thursday it was in talks to buy up to $6.0 billion of assets in the fast-growing Latin American telecoms market from U.S. carrier BellSouth Corp..
Investors welcomed the news and bought up shares in Telefonica, the largest carrier in the Spanish-speaking world, but BellSouth, the third-largest regional U.S. telecoms group, cautioned it was premature to make any comment beyond confirming the two were in talks.
Cash-rich Telefonica, which is seeing competition gnawing at its domestic market, saw its shares climb 0.61 percent to 13.23 euros by afternoon trade, bucking a weak European sector trend and extending a 13 percent gain this year.
However, analysts warned that the Spanish heavyweight might have to see off rivals such as Latin America's largest mobile operator, America Movil, if it wants to expand in a region seen as crucial for growth.
Telefonica estimated fair value of $5.5 to $6.0 billion on the Latin American operations but said it was premature to discuss a purchase price, which could depend on regulatory issues.
Analysts say BellSouth has for years held on-off talks about selling its Latin American mobile assets as it refocuses on the U.S. And they added a sale could help fund its share of a $41 billion purchase of U.S. mobile group AT&T Wireless.
But a BellSouth spokesman said its U.S. mobile expansion plans were not behind sale talks in Latin America. "There's no pressure on us to make a decision today as to how to we're going to pay for that acquisition," he said.
RIVAL BIDDERS?
Spanish newspapers, citing sources familiar with the situation, said Telefonica was not the sole bidder for the assets but its talks were the most advanced.
Financial daily Expansion said that Telecom Italia and Mexico's America Movil were also chasing the assets.
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