MILAN Dec 2 Telecom Italia has had no contact with potential buyers of its stake in Brazilian unit TIM Participacoes and has no plans to sell, it said on Monday, dismissing press reports about a possible deal.
The Brazilian authorities are concerned about competition in the local market after Spanish group Telefonica, TIM Participacoes's biggest rival in Brazil, moved to increase its holding in Telecom Italia.
Telecom Italia has repeatedly said that its majority stake in TIM Participacoes is a strategic asset, although has not closed the door to the idea of a sale at the right price.
"The company reaffirms the strategic importance for the group of its shareholding in TIM Brasil and in the Brazilian market, denying that there are any ongoing contacts with potential buyers," Telecom Italia said in a statement on Monday following a request by Italian market regulator Consob.
"Telecom Italia wishes to make clear that the rumours of presumed plans for the deconsolidation and/or total or partial valuation of the Brazilian asset, described and repeated by journalists, pundits and analysts are inferences wholly without foundation," it said.
Telefonica agreed in September to gradually boost its stake in the holding company that owns 22.4 percent of Telecom Italia and controls its board.
Sources familiar with the matter have told Reuters the Spanish group would seek a sale or break-up of TIM Participacoes, which has a current market capitalisation of around $12 billion, from the middle of next year.
Telecom Italia has a stake of nearly 67 percent in TIM Participacoes, held by TIM Brasil Servisos e Participacoes SA, according to Thomson Reuters data.
Telefonica's Vivo business is the market leader in Brazil's mobile market with a 28.7 percent market share, while TIM Participacoes has 27.2 percent, America Movil's Claro has 25 percent and Oi SA 18.6 percent, according to the industry regulator's data.