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 seek to cut the price paid for the mobile division of rival telecom Oi SA by 3.2 billion reais ($605.05 million), the filing of securities showed Monday.

The transaction, which closed earlier this year, included a joint offer by TIM, Claro of America Movil (AMXL.MX) and Vivo to acquire Oi’s mobile business for an original price of approximately 16 billion reais.

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

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Under the contract price adjustments, Oi would have to repay a total of 1.75 billion reais if the three buyers succeed in appealing the deal.

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

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The company said it could issue a formal notice of disagreement within the next 30 days.

The potential price adjustment following the deal caused Oi common stock to fall about 10% in morning trading.

Telefonica Brasil – which operates under the Vivo brand in the South American country – traded almost flat and Telecom Italia’s TIM (TLIT.MI) fell 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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