Stock Ticker

  • Loading stock data...

America Movil SAB de CV (ADR) (NYSE:AMX) Cut Ties With AT&T Inc (NYSE:T)

Boston, MA 05/28/2014 (wallstreetpr) – America Movil SAB de CV (ADR) (NYSE:AMX) and AT&T Inc (NYSE:T) are ending their business ties that date back to 90s. The move by AT&T to exit stake in AMX has been necessitated by the need to iron out regulatory issues.

AT&T Inc recently announced a bid for the satellite TV provider DirectTV (NASDAQ:DTV). The telecom giant placed $48.5 billion bid for Direct TV. It seems AT&T sees greater opportunity in the pay television market in the U.S. than in the mobile investment in Latin America. However, in addition to directing resources to promising investment opportunities, AT&T Inc also considers its hold in AMX as able to complicate the approval of its bid for Direct TV before the U.S. regulators. As such, the company deemed it wise to abandon stake in AMX.

Dealing with the aftermath

Two directors representing AT&T Inc in the board of America Movil SAB de CV (ADR) (NYSE:AMX) have already resigned their positions following the decision by the U.S. telecom giant to exit stake in AMX in favor of a deal with Direct TV.

America Movil is trying to grapple with how to deal with the stake of AT&T. While shareholders would benefit from a move by America Movil to purchase the 8 percent stake of AT&T, America Movil has debt position that puts it at a disadvantage. Therefore, sources privy to internal matters at AMX indicate that the Latin America telecom giant may not purchase a significant stake of the position being vacated by AT&T.

The most recent data show that AT&T’s stake in America Movil SAB de CV (ADR) (NYSE:AMX) is worth about $5.76 billion.

Show of confidence

Analysts believe that Carlos Slim, the billionaire owner of America Movil SAB de CV (ADR) (NYSE:AMX), may move to purchase the stake of AT&T in AMX to boost his personal holding in the company. The move may also serve as a morale booster for other investors as it would show the confidence that the billionaire has in the business.

However, with America Movil SAB de CV (ADR) (NYSE:AMX) and AT&T guarded in their comments over the issue, it is hard to tell how the companies will handle the vast stake that is ripe for sale.

Published by Lisa Ray

Lisa has a Bachelor of Arts in journalism from Purdue University and 3 years of experience in the publishing field.

  • Recent Stories

    SignUp Now For Our Featured Newsletter

    Sign Up To Get Our Latest Stocks Alerts