Buyout group Apollo Global Management and former SoftBank executive Marcelo Claure are in talks with Millicom International Cellular about a deal to acquire the Latin American telecoms company.
Luxembourg-based Millicom confirmed the talks in a statement on Wednesday, after the Financial Times first reported that Apollo and Claure had partnered for a potential deal.
Millicom said there was now certainty that a transaction would materialise.
The group is considering a bid at a high teens per share price, one person familiar with the matter said. Millicom’s Nasdaq-listed shares closed at $14.83 on Tuesday, valuing the business at roughly $9bn, given its sizeable debts.
Shares jumped as much as 20 per cent in New York trading on Wednesday after the FT first reported the potential deal.
Apollo and Claure are attempting to structure their bid in a way that would avoid them needing to repay or refinance about $6.9bn of Millicom’s existing debts, given the turbulence in financial markets and the large increase in interest rates since the Federal Reserve began tightening policy last year.
Banks across Wall Street are still struggling to offload billions of dollars in debt tied to previously agreed private equity takeovers, limiting their willingness to write large new loans. The backlog has gummed up the pipeline for newer deals, and dealmakers have warned that the higher cost of debt has diminished the appeal of many transactions for leveraged buyout shops.
Apollo declined to comment. Claure did not respond to a request for comment.
Apollo’s interest in Millicom underscores the investment group’s appetite to invest in the communications sector, where it has spent heavily in recent years.
Last year, Apollo paid $7.5bn to buy a unit from communications group Lumen Technologies. The division, renamed Brightspeed, provides telephone and broadband services to more than 6mn customers in the US.
That deal became one of the high-profile takeovers that banks struggled to…
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