He Argentine Government of Javier Milei has decided to suspend the sale of Argentine mobile telephone al Clarín Group. Without impact for Telefónica, because the operation is closed, charged and irrevocable, it could force Telecom Argentina (Clarín) to sell some assets.
Last February Telefónica announced the sale of its Argentine subsidiary for 1,245 million dollars (1,189 million euros) A Argentine Telecom of the Clarín Group. The possible veto does not affect Telefónica because the operation is closed and charged, although pending the approval of the defense agencies, but it is definitive and irrevocable. If the Argentine authorities detect a dominant position, the conditions only fall on the buyer, in this case, Telecom Argentina, who could be forced to sell assets.
The measure is based on a recommendation from the Competition Defense Commission since the operation will allow Telecom Argentina to control 61% of the mobile phone market, 69% of fixed telephony and in some areas of the country would concentrate 80% of the Internet service to homes. The Argentine government has not yet made a formal decision.
«News that does not affect Telefónica,» he explains Elena Fernández -Trapiella, Bankinter analyst, that in every married “positively this sales operation and the subsequent reinvestment of the funds obtained in businesses with greater potential for growth and profitability or debt reduction”.
«The valuation is attractive and greater than the estimated 800 million euros,» adds the expert, highlighting that «it represents 4.9% of group stock capitalization and 4.1% of net financial debt”In 2023 the Argentine subsidiary obtained revenues of 1,273 million euros (3% of the total) and an operational result (EBIT) of -199 million, to which a negative impact is added in the departure of differences per exchange rate of -48 million. Its book value was 76 million euros in 2023 (at the current change of 0.009 ars/EUR) -647 million in 2023.
«Telefónica is trying to accelerate the divestment of its businesses in Latin America,» explains Fernández-Trapiella. Telefónica’s strategic plan includes the sale of the subsidiaries that brings together in Telefónica Hispam (Argentina, Peru, Chile, Colombia, Mexico and Venezuela) to focus on its main markets: Spain (35%of the adjusted EBITDA), Brazil (32%), Germany (21%) and the United Kingdom (consolidated by equivalence through the Joint Venture Vmo2).
«With a weight in the consolidated Ebitda of 13% in 2024 and an Ebitda margin of 19.4% vs 32.1% for the group, Hispam is a ballast,» says Bankinter analyst. In 2024 its income amounted to 9,035 million euros, compared to 12,576 million in 2016 EBITDA at 1,754 million, compared to 2,228 million, respectively.
Besides, «This subsidiary elevates the group’s risk premium by being markets with high political instabilityLegal and fiscal insecurity and volatility of their currencies. ”In recent years, new entrants have increased the competitive profile in those markets. Therefore, in 2019 Telefónica segumed these subsidiaries in a holding, Telefónica Hispam, to, until its sale, reduce the exhibition through the sale of assets, which will gain self -sufficiency and do not drain the matrix.
With the funds obtained, “Telefónica could reinforce VMO2 to face Better the growing BT competition, accelerate the growth of Telefónica Tech (sales +10.0% in 2024 vs +1.6% for the group) or Reduce debt (DFN/EBITDA of 2.8x)”, Says the expert.
Bankinter grants a recommendation of ‘comprar‘For Telefónica, with an objective price of 4.50 euros per share which is a Moderate bullish potential of 4.33% in front of Friday’s closure. Today the actions of Teleco drop 0.28% in mid -morning until it marks 4.33 euros. So far this year, they rise somewhat less than 10%.