Exclusive: Liberty Latin America in a bid to acquire Millicom – sources

NEW YORK/FRANKFURT (Reuters) – Liberty Latin America Ltd (LILAC.O), a wireless and cable operator in South America and the Caribbean, has approached peer Millicom International Cellular SA TIGOsdb.ST with a takeover offer, people familiar with the matter said on Monday.

The deal would be one of the largest telecommunications companies in Latin America, making the combined company more weight to compete with some of the biggest players in the region, such as America Movil (AMXL.MX), Telefonica SA (TEF.MC) and AT&T Inc (T. N).

Liberty for Latin America, which is supported by the AMERICAN media and telecommunications mogul John Malone, in conversation with Millicom, a cable and mobile phone operator in Latin America and Africa, about a deal for several weeks, and there is no certainty that an agreement will be reached, one of the sources added.

In addition to borrowing from banks, Liberty Latin America considering the increase of the financing of an investment firm, such as a private equity fund, for the cash part of the bid, one of the sources said.

The sources asked not to be identified because the matter is confidential. Liberty Latin America and Millicom not immediately respond to requests for comment.

Millicom shares jumped 8 percent to $72.10 on the news in New York on Monday, giving the company a market capitalization of nearly $7 billion. Liberty Latin America shares rose 2 percent to $16.98, giving it a market value of $3.1 billion.

Were the deal to happen, it would indicate the importance of the scale in the Latin American telecommunications market. The inflation, currency fluctuations, corruption and political instability are just some of the challenges for the operators in the region.

Millicom provides mobile services to approximately 51 million customers under the brand name Tigo, in nine Latin American countries and the African countries of Chad and Tanzania. Swedish investment company Kinnevik AB (KINVb.ST) had 37.2 percent a majority of votes on Millicom, at the end of December. Kinnevik is the trimming of the wireless tower portfolio throughout the world.

Millicom is listed in Stockholm, but also began trading on the Nasdaq earlier this month.

Liberty for Latin America, which is active in more than 20 countries in Latin America and the Caribbean, is a spin-off from Malone’s Liberty Global Plc (LBTYA.O) last year. The consumer with the following brands: VTR, Flow, Freedom, Más Móvil, BTC and Cabletica.

Malone is the largest shareholder of Charter Communications Inc (CHTR.O), the second-largest U.S. cable company. He has about a quarter of the voting rights in Liberty Latin America.

Reporting by Liana B. Baker in New York and Arno Schuetze in Frankfurt; Additional reporting by Pamela Barbaglia in London; Editing by Nick Zieminski and Steve Orlofsky

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