Entel Watches GTD Buy Flounder

Chile’s Entel attempts to create the country’s second largest telecom operator fell through this week after GTD Grupo Teleductos, through its parent, rejected its advances. GTD simply said that its controlling shareholder, Inmobiliaria e Inversiones El Coigue, had decided not to proceed with Entel’s acquisition offer. For its part, Entel attributes the failure of the deal to “the unilateral retraction of Juan Manuel Casanueva Prendez, representative and head of GTD.” Company officials at Entel and GTD could not immediately be reached for additional details. In late November, Entel offered to purchase GTD in exchange for a 9.8% stake in the Chilean telecom operator, but Chilean antitrust regulator Fiscalia Nacional Economica (FNE) recently placed acquisition under review, arguing that it could produce a company with excessive market power in certain service segments. The FNE said the new company must divest its 50MHz spectrum, and maintain several GTD products for at least two years. Entel has a $4.46bn market capitalization, with a free float of some 236,523,695 shares. In 2010, the company generated Ebitda of around CLP67.5bn on the back of some CLP150bn ($285.8m) in revenues. The deal sought to create the country’s second largest telecom operator, competing with Claro, a unit of Mexico’s America Movil, and Movistar, owned by Spain’s Telefonica.