AT&T sells part of its stake in TracFone owner América Móvil for $564M

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AT&T (NYSE:T) sold 7.5 percent of its stake in América Móvil, netting the company about $564 million and returning AT&T's total stake in the telecom giant to its historic level of around 9 percent.

According to a filing with the Securities and Exchange Commission, AT&T sold around 540 million América Móvil shares on the open market in Mexico between May 7 and June 4. América Móvil, also known as AMX, had recently increased share repurchases, which had increased AT&T's stake in the company. AT&T currently has two employees on América Móvil's board.

"From time to time we rebalance our asset levels and raise cash for general corporate purposes," AT&T said in a statement. "We've historically owned about 9 percent of AMX. As a result of AMX's recent share repurchases and our sales, we will again hold an approximate 9 percent interest in AMX."

"We don't currently intend to completely divest our stake in [América Móvil], but I can't speculate regarding our future activity," an AT&T spokeswoman told Dow Jones Newswires.

AT&T indicated in March it is open to selling some of its non-core assets, which might include wireless towers. There also has been speculation that AT&T might join forces with the investment and media company Chernin Group to acquire Hulu in a joint bid that could top $1 billion.

"We do not expect AT&T to continue their selling, nor do we expect AT&T to give up its board seats," BTIG analyst Walter Piecyk wrote in a blog post. "While América Móvil's U.S. subsidiary [TracFone] has been shifting wholesale minutes and data usage to Verizon (NYSE:VZ), we still think the companies have a positive relationship."

MVNO TracFone, which operates brands including Straight Talk and Net10, uses AT&T, Verizon, Sprint Nextel (NYSE:S) and T-Mobile US' (NYSE:TMUS) networks.

As Bloomberg notes, AT&T's relationship with América Móvil goes back to 1990, when AT&T's predecessor, Southwestern Bell Corp., helped the company's owner, billionaire Carlos Slim, take Mexico's state-owned phone company private. AT&T CEO Randall Stephenson managed the company's Mexican investments earlier in his career and worked closely with Slim. In late 2011 the companies joined forces to expand and enhance the coverage of their respective IP networks to provide services to multinational corporation customers in and from emerging markets.

For more:
- see this SEC filing
- see this Bloomberg article
- see this Reuters article
- see this Dow Jones Newswires article
- see this BTIG blog post (reg. req.)

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