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AMX - America Movil

fareastwarriors

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fareastwarriors Newbie

fareastwarriors

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http://www.bloomberg.com/news/2013-03-12/carlos-slim-s-america-movil-faces-breakup-pressure-in-new-bill.html

 

there is a lot of talk of breaking Carlos Slim's near monoploy in telecom in Mexico.  anyone with special insights in what's going on right now? and about the company in general?

 

 

http://online.wsj.com/article/SB10001424127887324096404578354543917674044.html?KEYWORDS=america+movil#articleTabs%3Darticle

 

Mexico Goes After Its Monopolies

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oddballstocks Newbie

oddballstocks

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I was in this one for years, a decade actually right from the spin, I recently sold.  Here's my perspective on them, I like when they were growing and expanding rapidly in Latin America.  Spectrum was easy to get and subscribers came easy as well.  Also AMX didn't have any legacy lines.  For a while TelMex did ok, but towards the middle of the decade things really fell off for them in terms of subscribers.

 

TelMex spun out TelMex International which was the fixed lines and internet services outside of Mexico.  AMX merged them in, and then eventually merged with TelMex.  So Slim has his empire back, this is what he originally wanted, TelMex to own everything.  I think for the decade it was broken apart it was killing him.

 

I didn't like the mergers, the other services are lower margins, and the legacy TelMex has a shrinking revenue base.  Additionally most of their fixed lines are in rural areas, prices are competitive in urban areas but they have a monopoly and charge gouging prices in rural markets.  Since they're the only provider they get that marketshare, yet many of these markets are money losing.  In exchange for the monopoly TelMex possessed the government won't allow them to abandon the rural market.

 

So I looked at the investment and saw falling margins and the drag from the fixed lines.  They've been putting the broadcast carrot out for years, I remember back in 2006 the company was talking about offering a triple play, TV, Internet, Phone.  Seven years later and they still aren't in broadcasting.

 

I got tired of waiting, and the regulators are finally cracking down like they never have before.  The company is now chasing growth in Europe and having a lot of trouble.  The market has changed as well.  I could be enticed back in at a much lower price, especially since I know the company so well.

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enoch01 Newbie

enoch01

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Additionally most of their fixed lines are in rural areas, prices are competitive in urban areas but they have a monopoly and charge gouging prices in rural markets.  Since they're the only provider they get that marketshare, yet many of these markets are money losing.  In exchange for the monopoly TelMex possessed the government won't allow them to abandon the rural market.

 

So I looked at the investment and saw falling margins and the drag from the fixed lines.  They've been putting the broadcast carrot out for years, I remember back in 2006 the company was talking about offering a triple play, TV, Internet, Phone.  Seven years later and they still aren't in broadcasting.

 

Thanks for sharing.

 

One thing I didn't follow.  Why are the rural markets a drag?  They have a monopoly and charge gouging prices, right?  So why would it be a drag, and why would the government have to force them to be there?  Are the other super high costs that aren't in there control?

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  • 4 months later...
fareastwarriors Newbie

fareastwarriors

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Slim's Lack of Movility With KPN

 

http://online.wsj.com/article/SB10001424127887323997004578643302804559118.html?mod=WSJ_HOS_LeadStory

 

 

Call it cellphones at dawn.

 

KPN NV's KPN.AE -4.03%biggest shareholder— Carlos Slim's América Móvil SAB AMX.MX -1.18%—hasn't said whether it supports the Dutch telecom operator's decision to sell its German carrier E-Plus to Telefónica Deutschland O2D.XE -0.69%for €8.1 billion ($10.70 billion).

 

Mr. Slim may not like KPN's deal. But the Mexican billionaire's company has limited room for maneuver.

 

KPN's beleaguered shareholders must hope América Móvil backs the deal: selling E-Plus would end KPN's debt strains, allowing it to resume paying dividends in 2014 while maintaining a 17.6% stake in a hopefully strengthened German operator.

 

For América Móvil, however, which has bemoaned its lack of opportunities in Latin America, a foothold in Europe's biggest economy was likely a key part of its investment in KPN a year ago. Besides, the offer for E-Plus, while reasonable, is no knockout. It looks rich at nine times 2013 earnings before interest, taxes, depreciation and amortization but those earnings are being depressed by unusually high investment this year.

 

The snag is that América Móvil's 29.8% stake may not be enough to block the deal, which requires the backing of a majority of voting shareholders. Turnout could easily exceed KPN's 50% historical average.

 

And Mr. Slim is constrained by América Móvil's own debt pile. The company has made clear its commitment to protect its current investment-grade credit rating.

 

Therein lies the problem. América Móvil could launch an offer to KPN's other shareholders, after terminating a standstill agreement this week that prevented the Mexican company adding to its stake. But net debt to Ebitda already slightly exceeds América Móvil's target of 1.5 times. Moody's has said the company's debt ratios are at the upper end of acceptable levels for its current rating.

 

América Móvil can't simply buy shares in the market: exceeding 30% would trigger an expensive mandatory takeover offer at the highest price it paid for shares in the previous 12 months.

 

So unless the company can secure the help of a partner, América Móvil faces a balancing act. It could pitch an offer at a modest premium to KPN's current share price—already up 32% since the E-Plus deal leaked in July. Making the offer conditional on América Móvil exceeding 50% could allow the Mexican company to achieve control without spending too much. If it makes too modest an offer, however, the pitch could fail.

 

A more generous offer, on the other hand, risks enthusiastic acceptance from KPN's long-suffering investors. After all, the E-Plus deal is promising, but regulators may still block the transaction. Yet that could imperil América Móvil's rating.

 

The question for Mr. Slim is how badly he wants to hang on to his launchpad in Europe. The good news for KPN's shareholders is that—regulatory stumbling blocks aside—they may benefit either way.

 

 

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fareastwarriors Newbie

fareastwarriors

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http://www.bloomberg.com/news/2013-08-09/america-movil-bids-2-40-euros-a-share-to-buy-all-of-kpn.html

 

 

Slim’s America Movil to Bid for Full Control of KPN

 

 

 

Carlos Slim’s America Movil SAB plans to buy the rest of Royal KPN NV for 7.2 billion euros ($9.6 billion), a move that may interfere with a bigger deal by the Dutch carrier to sell its German business to Telefonica SA.

 

America Movil will bid 2.40 euros a share in cash for the 70 percent in KPN that it doesn’t own, the Mexico City-based company said today. That’s 20 percent more than yesterday’s close. KPN rose 17 percent to 2.34 euros at 3:54 p.m. in Amsterdam, and America Movil slumped as much as 7.2 percent in Mexico City. The offer, to be made official next month, is subject to America Movil winning a stake of more than 50 percent.

 

...

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