The price paid by Telecom Americas for BSE ? 180 million US Dollars, plus 620m USD in debt ? surprised analysts consulted by TELETIME News. The value per subscriber, 800 USD, is double what Telesp Celular paid to acquire a controlling stake in TCO, considered a higher-quality asset. However, some analysts believe TCO was acquired for only 400 USD per subscriber because of the low price set for preferred shares (nonvoting in Brazil). Indeed, minority shareholders have complained about that price to CVM, the securities and exchange regulator. Based on the price of common (i.e. voting) stock, the price of TCO wasn?t too different from 800 USD.
BCP is also up for sale and analysts are now wondering how best to value the B-band wireless carrier for metropolitan São Paulo. Considering its debts of 1.7bn USD, the price per subscriber should be 1,000 USD. That corresponds to a 20% premium on the price paid for sister company BSE (based in the Northeast). Removing the 20% premium would reduce BCP?s value to 1.36bn USD, which is ?out of the question? according to the president of a leading creditor bank. However, the same source acknowledges the possibility of a thoroughgoing debt restructuring deal if the buyer repays ?a major portion? of the principal. He also suggests that BellSouth and Safra, which control BCP, could keep a minority stake and that an injection of 1bn USD would be enough to put the company back on its feet, boosting competition in São Paulo.
M&A
