AT&T divested itself of 540 million shares in Latin American-based telecom giant America Movil in a move the carrier said was designed to maintain its position in America Movil following recent share repurchases by that operator.
In a Securities and Exchange Commission filing, AT&T noted that during May and June it had sold the 540 million shares in America Movil on the open market for between 99 cents and $1.09 per share. The company told The Wall Street Journal that the move was made in order to maintain its 9% equity stake in America Movil.
Financial analysts took the move one step further, noting that AT&T could be setting itself up for an eventual liquidation of its America Movil holdings in favor of gaining a stronger foothold in the other markets. Macquarie Equities Research put out a note claiming that one potential target for AT&T could be Vodafone’s wireline business, echoing rumors from earlier this year that AT&T was looking to partner with domestic rival Verizon Communications to take out all of Vodafone.
That rumor had Verizon acquiring the 45% stake in Verizon Wireless controlled by Vodafone for something north of $100 billion, with AT&T then swooping in to acquire the rest of Vodafone’s international operations in a total deal value of $245 billion. Verizon quickly splashed cold water on that rumor, denying it was working with AT&T on a deal.
However, reports continue to circulate that Verizon is still working on a way to get full control of Verizon Wireless from Vodafone. Recent reports indicated that Vodafone shareholders were looking at closer to $120 billion for its 45% stake in Verizon Wireless, something that analysts said was still within reach of Verizon.
Macquarie Equities noted that if Verizon did move on that offer, AT&T would then be able to swoop in with an offer for the rest of Vodafone.
“We continue to believe that [AT&T] lacks a growth strategy and a driver for its stock and that a big, bold deal is needed before the buyback slows, rates rise and wireless competition intensifies,” Macquarie Equities noted in a research note. “We would likely become more positive on [AT&T] shares if such a transaction is consummated.”
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