Broadcaster Televisa hopes to bring quadruple play to Mexican consumers after buying a 30% equity stake in wireless provider Nextel Mexico for $1.44bn in cash, while taking an option on an additional 7.5%. Televisa said Monday it is making an initial investment of $1.14bn with the remainder in 3 equal annual installments. “There are significant synergies between Nextel Mexico’s wireless offerings and our extensive base of pay TV subscribers,” says Emilio Azcarraga Jean, chairman and CEO of Grupo Televisa. “With this venture we will be able to offer to our customer base the first quadruple play in Mexico, which paves the way for a successful integrated media and telecom strategy,” he adds. Quadruple play combines broadband internet, TV, telephone and wireless. The deal is conditional on Nextel/Televisa being awarded licenses to use specified amounts of spectrum in upcoming auctions in Mexico. Televisa’s option on an extra 7.5% stake is exercisable on either the 3rd or 4th anniversary of closing of the initial investment, at a price based on fair market value of Nextel Mexico at the time, the companies say in a joint statement. The agreement provides for negotiation of commercial arrangements between Nextel Mexico, Televisa and affiliates to offer new service bundles. Seller NII Holdings was advised by Lazard, while Allen & Co helped Televisa, according to wires. Spokesmen for both sides did not answer requests for further comment. Televisa said last week it had received antitrust approval for the potential acquisition of a minority stake in Nextel. Through Monday’s deal, Televisa also gets the right to appoint 2 of 6 Nextel Mexico board members as well as special approval rights for specified significant decisions, transactions and corporate events. NII Holdings retains 70% of the equity in Nextel Mexico and will appoint the remaining 4 board members. Televisa closed up 0.85% at MXP48.63 Monday while NII Holdings rallied 2.76% to $36.07.
Category: Daily Brief
Peru Rates Stay Put
In line with market consensus, Peru’s central bank kept its monetary policy rate unchanged at 1.25%, saying inflation, at an annualized rate of 0.44% in January, is below the 1.00% target. Morgan Stanley expects monetary tightening during the second half. Bank of America Merrill Lynch agrees that the rate will stay at 1.25% until H2. It expects annualized inflation to increase to 1.5% by the end of 2010.
Chile Keeps Rates Intact
As was widely expected, Chile’s central bank kept its monetary policy rate at 0.5%. It says that on one hand, global volatility had hurt the price of copper and oil, and on the other, domestic activity is expanding faster than expected, unemployment is on a downward trend and credit conditions have stabilized. “We continue to expect the central bank to begin raising the policy rate in July, but see risks slightly tilted to the earlier side, given the strong tone of recent activity data and the CLP depreciation,” says Barclays. Bulltick expects the bank to remain on hold at 0.5% through H1 and raise rates a total of 150bp to 2.0% in 2010. “We expect inflation to end the year at 2.13%, GDP to expand 5.0%, and the CLP to rebound to CLP500 per USD,” the shop adds.
Brazil Banks Forge ATM Alliance
Banco Santander, Banco do Brasil and Bradesco have agreed to consolidate their outdoor ATM machine networks. Together they include about 11,000 machines located in airports, gas stations, supermarkets, shopping malls, drugstores and bus terminals. Statements from the banks indicate that the move will increase the networks’ cost efficiency and provide better access for clients. A new brand will be created for the merged ATM networks. The banks expect to conclude the deal in 5 months.
Cimpor Bid Knocks Camargo Rating
Fitch has downgraded the ratings of Brazilian industrial conglomerate Camargo Correa to BB minus from BB after the company announced it had purchased a 22% share in Cimpor for EUR961m. The outlook was revised to stable from negative. “The downgrade reflects the leveraging effect this transaction will have on Camargo’s credit protection measures, which were already weak for the rating category on a net debt basis,” Fitch says. Camargo’s net debt is expected to increase to BRL10.1bn from BRL 7.7.bn on a pro forma basis. Its pro forma net leverage ratio would climb to 3.5x from 2.7x. However, Fitch says the deal allows Camargo to increase its presence in global cement, and it should result in synergies with Camargo’s highly correlated core cement, engineering and construction businesses.
Ecuador Gets CAF Credit
Multilateral CAF has approved $200m in loans to Ecuador. Out of the total sum, $100m will be a loan to improve the country’s drinking water services and sewage system. The other $100m will be a revolving credit line to Ecuador’s development bank, Corporacion Financiera Nacional, that will help it assist the productive sector.
Colombia Infrastructure Fund Eyes First Close
Fintra, a private equity fund that will invest in Colombian transportation infrastructure, is expected to make its first closing of $150m this month, company spokesman Andres Marulanda confirms. He adds that investors are local. The fund, which is 70% controlled by Washington DC-based Darby Overseas and 30% controlled by Mercantil Colpatria, expects to make a second closing 12 months from now, Marulanda adds. He explains that potential investments are already being evaluated and that they should begin in Q1. The fund managers are Bogota-based Jorge Castellanos, who was previously banks superintendent and president of Bancafe, as well as Rick Frank of Darby.
Pinera Puts Clinic Stake on Block
Bancard Inversiones, an investment vehicle controlled by Chile’s president elect Sebastian Pinera, will auction the 9.7% stake, or 792,338 shares, it holds in Clinica Las Condes on February 16, for a minimum price of CLP24,000, confirms a source with knowledge of the deal. LarrainVial will handle the auction. The shares closed at CLP25,000 on the day of the announcement, bringing the total value of the stake to $36m. Pinera is also seeking to divest his 26% stake in LAN Airlines before he becomes president on March 11.
CapGold Buys Smaller Mexico Miner
US-based Capital Gold has acquired Canada’s Nayarit Gold in a share swap worth $41m. The move has puzzled mining analysts who cover Capital Gold stocks. “I think they paid an expensive price for a puny asset,” says equities strategist Christopher Ecclestone at Hallgarten. “Nayarit’s resource is small and does nothing to move Capital Gold towards its goal of production of over 100,000 ounces per annum in the short term,” he adds. Adam Graf, director of equity research at New York shop Dahlman Rose, also questions why Capital would buy a much smaller miner instead of a peer with similar assets. He adds that the latter abound in northern Mexico, where both seller and buyer operate. Company information shows that while Capital Gold has inferred gold resources of 157,000 ounces, Nayarit only has 19,000. Nayarit does however have inferred silver resources of 552,894 ounces, while Capital Gold has none. Investors also appear to have questioned the deal, as the companies’ stock prices dropped on the day of the announcement, with Capital down about 0.4% and Nayarit’s off almost 4.0%. Capital Gold president John Brownlie was not available to comment on the criticism of the deal. However, earlier in the day he did tell LatinFinance that after the purchase is completed, the company will seek more acquisition opportunities in northern Mexico. Jennings Capital is Capital Gold’s financial advisor. Nayarit’s legal counsel is Peterson Law in Canada and Kavinoky Cook in the US.
Ausol Extends Restructuring Offer
Autopsitas del Sol has extended its debt exchange offer to March 3 from February 10, and notes it has received acceptance from holders of $98m, or 31.9% of its total $306m debt. The toll-road operator is looking to extend maturities in the restructuring, offering holders of 3.50% of 2014 bonds (which step up to 5.0% this year) and holders of 11.5% of 2017 bonds the choice of new 2015 peso denominated floating-rate bonds, new 2020 step-up notes, both in a par exchange, or $400 cash for $1,000 principal. Accepting holders choosing new bonds then also have the additional option of exchanging new notes obtained at par for new 2017 bonds at a 10% discount. Barclays is managing the process.