HOLA, COLOMBIA! SLIM'S ON THE LINE

Global Finance, Oct 2005 by Platt, Gordon

COMPANY TO WATCH: TELÉFONOS DE MÉXICO/MEXICO

Already the largest telecommunications company in Latin America,Telniex, as Telefonos de Mexico is more commonly known, has made a bid for 50%-plus-one-share of Colombia Telecomunicaciones, Colombia's state-run communications carrier, also known as Telecom.

If the bid succeeds, Telmex will merge its local subsidiary, Telmex Colombia, with Telecom.

Telmex agreed to pay $260 million in cash and $90 million in Telmex Colombia stock and to assume as much as $3 billion of Telecom's debt.Telmex also would receive a management fee in the agreement.

Antonio Hernandez, Mexico's chief auditor, urged Telecom's board of directors to rebuff the offer, saying that the company should be sold at public auction and that the price offered by Telmex was too low. Nonetheless, analysts expect the transaction to go ahead, since it apparently has the blessing of Colombian President Alvaro Uribe.

Meanwhile, Carso Global Telecom, the holding company controlled by Mexican billionaire Carlos Slim Helu, which owns 71% of Telmex, is on a buying spree in the region. It already has acquired the assets of bankrupt AT&T Latin America and a 52% share of Brazil's leading long-distance carrier Embratel. -GP