TIM, Vivo, Claro seek $606 million haircut in Brazil’s Oi deal

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SAO PAULO, Sept 19 (Reuters) – TIM SA (TIMS3.SA), Telefonica Brasil (VIVT3.SA) and Claro are seeking to lower price paid for rival telecom Oi SA’s mobile division by 3.2 billion reais ($605.05 million), securities filings shown on Monday.

The transaction, which concluded earlier this year, included a joint bid by TIM, America Movil’s Claro (AMXL.MX) and Vivo to acquire Oi’s mobile operations at an original price of about 16 billion reais.

But post-deal analysis showed the need for an adjusted closing price, TIM said in a securities filing, citing divergences in working capital, capital expenditure and net adds data that were seen in documents available only after closing.

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Under the contract agreements on price adjustments, Oi would need to repay a total of 1.75 billion reais if the three buyers succeed in their deal appeal.

In a separate filing, Oi said it strongly disagreed with the request to cut the price by about a fifth, which it dubbed as based on technical and procedural errors, and that it will take measures to contest it.

The company said it might issue a formal disagreement notification within the next 30 days.

The potential post-deal price adjustment led common shares in Oi to plunge roughly 10% in morning trading.

Telefonica Brasil – which operates under the Vivo brand in the South American country – was trading near flat and Telecom Italia’s (TLIT.MI) TIM dropped 1.3%.

($1 = 5.2888 reais)

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Reporting by Gabriel Araujo; Editing by Christian Plumb and Jane Merriman

Our Standards: The Thomson Reuters Trust Principles.

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