Latin American telecommunications provider Millicom International said an independent committee established by its board of directors to study a tender offer from Atlas Luxco recommended shareholders reject its $2.9 billion bid to take the firm private.
The committee said the offer of $24 per share “significantly” undervalues the company, according to a press release issued on Monday. The Atlas bid, which values Millicom at $4.1 billion, does not take into account forecasts for the firm’s equity free cash flow and leverage this year or reflect the valuation implied by its long-term business plan, the statement said.
Controlled by French businessman Xavier Niel, Atlas launched a formal offer for the telco July 1. The firm owns 29% of Luxembourg-headquartered Millicom, which trades under the Tigo brand.
Millicom and the independent committee are receiving financial advice from Goldman Sachs and Morgan Stanley while their legal advisers are Davis Polk & Wardwell, Nord Advokater, Advokatfirman Lindahl and Hogan Lovells.
In Colombia, meanwhile, the mayor of Medellín Federico Gutiérrez proposed the city-owned utility EPM sell its majority stake in its loss-making joint venture with Millicom, Tigo-UNE. The city would invest the proceeds from the sale in science, technology and innovation projects and university scholarships, he said July 4. His proposal is being evaluated by the city council.