Millicom Abruptly Halts Takeover Talks with Apollo, Claure Group
June 16, 2023
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Millicom International Cellular ($NASDAQ:TIGO) S.A (MILLICOM) is a large telecommunications and media company based in Luxembourg. The company operates in fourteen countries in Latin America, Africa, and Asia and provides services such as mobile communication, digital financial services, and television and broadband services. On Monday, Millicom abruptly halted takeover talks with Apollo Global Management Inc and Claure Group LLC to acquire its shares. Following the news, MILLICOM’s stock price suffered a sharp decline due to investors selling off their Millicom shares. It appears that the discussions were cut short due to discord between the two potential buyers on the value of Millicom’s shares. The halt of negotiations came as a surprise to many investors as the potential takeover had been announced just a few weeks ago, sending Millicom’s stock price up significantly. The potential takeover had also been seen as a positive sign for the company’s growth prospects.
However, the abrupt halt in negotiations has now caused many to question the future of MILLICOM and its stock price. It remains to be seen if Millicom will explore other options for a potential takeover or if it will continue to operate independently. Regardless, the news of the sudden halt of negotiations have led to a decrease in investor confidence in the company and its stock.
Stock Price
Millicom International Cellular S.A has recently ended its potential merger discussion with Apollo Global Management, Inc., and the Claure Group. This development was made public on Thursday, when MILLICOM INTERNATIONAL CELLULAR S.A stock opened at $17.2 and closed at $17.5, up by 1.1% from prior day’s closing price of 17.3. This step marks the termination of the prospects of the potential merger, which was initially announced in early April. The details of the talks between the two companies were not revealed, however, MILLICOM INTERNATIONAL CELLULAR S.A has decided to focus on its organic growth in the foreseeable future.
This news has had a positive impact on the stock price of Millicom International Cellular S.A, as it has increased by 1.1% since Thursday’s opening. It remains to be seen what effect this abrupt end of the takeover talks has on the company’s future prospects. Live Quote…
About the Company
Income Snapshot
Below shows the total revenue, net income and net margin for TIGO. More…
| Total Revenues | Net Income | Net Margin |
| 5.59k | 157 | 1.4% |
Cash Flow Snapshot
Below shows the cash from operations, investing and financing for TIGO. More…
| Operations | Investing | Financing |
| 1.22k | -1.15k | 154 |
Balance Sheet Snapshot
Below shows the total assets, liabilities and book value per share for TIGO. More…
| Total Assets | Total Liabilities | Book Value Per Share |
| 14.43k | 10.8k | 21.18 |
Key Ratios Snapshot
Some of the financial key ratios for TIGO are shown below. More…
| 3Y Rev Growth | 3Y Operating Profit Growth | Operating Margin |
| 8.4% | 27.4% | 13.4% |
| FCF Margin | ROE | ROA |
| 2.0% | 12.9% | 3.2% |
Analysis
GoodWhale analyzed MILLICOM INTERNATIONAL CELLULAR S.A.’s fundamentals and found that it is classified as a ‘gorilla’ on the Star Chart. This type of company is usually characterized by strong competitive advantages that have enabled it to achieve stable and high revenue or earning growth. As such, value and growth investors may be particularly interested in such a company. Further analysis of MILLICOM INTERNATIONAL CELLULAR S.A. reveals that it is strong in medium in growth, profitability, and weak in asset and dividend. However, the company has an intermediate health score of 6/10 taking into account its cashflows and debt, indicating that it likely has the resources to securely ride out any potential crisis without the risk of bankruptcy. More…
Peers
The company has a strong presence in both regions, with over 55 million customers and operations in 19 countries. Millicom is a leading provider of mobile voice and data services, fixed-line telephony, and broadband internet. The company has a significant market share in both prepaid and postpaid mobile services. Millicom’s main competitors are Shaw Communications Inc, SK Telecom Co Ltd, and StarHub Ltd. These companies are all leading providers of telecommunications services in their respective markets. Shaw is the largest provider of telecommunications services in Canada, with over 10 million customers. SK Telecom is the largest mobile operator in South Korea, with over 50 million subscribers. StarHub is the largest provider of pay TV and broadband internet services in Singapore, with over 1 million customers.
– Shaw Communications Inc ($TSX:SJR.B)
Shaw Communications Inc is a Canadian telecommunications company that provides telephone, Internet, television, and wireless services to consumers and businesses in Canada. The company has a market capitalization of $17.67 billion as of 2022 and a return on equity of 12.9%. Shaw is one of the leading providers of telecommunications services in Canada and is headquartered in Calgary, Alberta.
– SK Telecom Co Ltd ($KOSE:017670)
SK Telecom Co Ltd is a South Korean wireless telecommunications operator, with headquarters in the Bundang District of Seongnam, South Korea. The company was founded in March 1984 as Korea’s first wireless telecommunications provider, and as of 2020, it is South Korea’s largest mobile telecommunications operator. SK Telecom is also the world’s first commercial CDMA2000 1xEV-DO service. The company controls around half of South Korea’s mobile market share, with 29 million subscribers as of 2020. The company’s stock trades on the Korea Exchange under the ticker symbol 017670.
SK Telecom has a market capitalization of 10.97 trillion won as of December 2020. The company’s return on equity (ROE) was 9.16% as of the same date.
SK Telecom is South Korea’s largest wireless telecommunications operator, with a 50% market share in the country. The company offers voice, data, and multimedia services to its customers, and also provides a wide range of mobile devices and accessories. SK Telecom’s multimedia services include T-money (a prepaid card used for public transportation), T-store (an app store), and Tcast (an online streaming service). The company also has a wide range of business solutions, including enterprise mobility, cloud, big data, and IoT.
– StarHub Ltd ($SGX:CC3)
Singaporean telecommunications company StarHub has a market capitalization of 1.82 billion as of 2022. The company’s return on equity is 24.2%. StarHub is a leading provider of mobile, broadband, and pay TV services in Singapore. The company offers a wide range of services to both residential and business customers. StarHub’s mobile network covers more than 99% of the country’s population. The company’s broadband network reaches more than 98% of households. StarHub’s pay TV service, HubTV, has more than 400 channels and is available in HD.
Summary
MILLICOM International Cellular S.A.’s (Millicom) stock dropped after the announcement that takeover talks with the Apollo Global Management LLC and Marcelo Claure’s Claure Group had ended without a deal. Analysts suggest that the failed talks may be due to Millicom’s high valuation, or a lack of agreement on terms. Analysts suggest that the uncertain future of the company may cause further falls in the stock price and discourage potential buyers, making it an uncertain investment. Investors should monitor the situation closely, as any future developments may lead to changes in Millicom’s share price.
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