AT&T Inc. (NYSE:T) is selling its stake in America Movil SAB de CV (ADR) (NYSE:AMX) because of a conflict of interest, Bloomberg’s Crayton Harrison said in an interview with Betty Liu.
The explanation comes after AT&T Inc. (NYSE:T) divulged on Friday that it is selling its stake in America Movil SAB de CV (ADR) (NYSE:AMX) to Carlos Slim Helú, the biggest stakeholder of the company. The stake is valued at $5.6 billion.
According to Harrison, the AT&T Inc. (NYSE:T) move is to protect its bid to acquire DIRECTV (NASDAQ:DTV) in a $48.5 billion deal. America Movil SAB de CV (ADR) (NYSE:AMX) operates businesses in South America which directly compete with DirecTV. He explained when asked by Liu:
“As you know, AT&T has another big deal in the works. They are buying DirecTV for $48.5 billion. That creates a conflict of interest because DirecTV has a bunch of operations in Latin America where América Móvil also operates. They compete against each other for TV customers.”
Liu then asked Harrison why AT&T Inc. (NYSE:T) has been an investor in America Movil SAB de CV (ADR) (NYSE:AMX) in the first place and for as long as it has been. According to Harrison, the U.S. carrier has been an investor in América Móvil even before it became what it is today. He added that Carlos Slim Helú was the person who privatized the telephone company in Mexico back in 1990. This was done by the billionaire, Harrison said, with the backing of the company that is now AT&T.
As for how this partnership was formed, Harrison said that France Télécom S.A. [now Orange S.A]was involved in this alliance. Watch the explanation below.
AT&T Inc. (NYSE:T) shareholders includes Joel Greenblatt’s Gotham Asset Management which reported 704,440 shares in the company by the end of March. Another investor is Peter Muller’s Pdt Partners which had 657,528 in this same period.
America Movil SAB de CV (ADR) (NYSE:AMX) shareholders includes Cliff Asness’ Aqr Capital Management which had about 4,82 million shares in the company by the end of the first quarter of the year. Another hedge fund which is a shareholder of the company is Arrowstreet Capital managed by Peter Rathjens, Bruce Clarke and John Campbell. The firm said by the end of March that it held about 2.29 million shares in the company.