What happened
Shares of NII Holdings (NIHD +0.00%) have soared today, up 20% as of 12:45 p.m. EDT, after Bloomberg reported that Telecom Italia is considering a bid for Nextel Brazil. NII has been looking for a buyer in recent months.
So what
Telecom Italia's subsidiary in Brazil is interested in scooping up Nextel Brazil, which would help it expand market share while bolstering its spectrum holdings in urban markets, according to the report. Telecom Italia CEO Amos Genish wants to bring up the notion at a board meeting later this month, and would retain financial advisors to assess the deal if it gets the board's blessing.
Image source: Getty Images.
Now what
Reuters had previously reported that NII expected to begin receiving offers for Nextel Brazil in September, and NII confirmed in August that it was "exploring strategic alternatives" but cautioned that there is "no guarantee that any such opportunities will come to fruition."
During last quarter's earnings, NII CFO Dan Freiman reiterated that NII is still trying to cut costs and improve liquidity. The company expects cash burn for the second half of 2018 to be $100 million or less, and NII raised $100 million in convertible senior notes last month to strengthen its cash position. Genish has also broached the idea of other asset sales, according to the report, which could potentially entail divesting its Sparkle or Persidera subsidiaries, among other candidates.
