Telefonica SA (TEF), Spain’s largest phone company, approved the initial public offering of its Atento Inversiones y Teleservicios call-center division.
Telefonica plans to sell more than 50 percent of Atento to investors, the Madrid-based company said in a filing today. The sale may raise about 800 million euros ($1.1 billion), giving the division a valuation of about 1.5 billion euros, said two people familiar with the plan, asking not to be identified because the discussions are private.
Chairman and Chief Executive Officer Cesar Alierta, who had tried to sell Atento as early as in 2007, is seeking to reduce debt and focus on Latin America to offset declining domestic market share. Telefonica today reported a 1.9 percent decline in first-quarter net income to 1.62 billion euros, missing analyst estimates, as earnings in the Spanish market shrank.
Citigroup Inc. (C) and Goldman Sachs Group Inc. will manage the IPO, along with Banco Santander SA, BNP Paribas SA, JPMorgan Chase & Co. and Banco Bilbao Vizcaya Argentaria SA, according to a term sheet. The stock price will be set by about June 9.
Atento’s revenue rose 26 percent last year to 1.66 billion euros, with the largest part coming from Brazil, according to Telefonica’a annual report. Operating profit before depreciation and amortization increased 23 percent to 190 million euros.
Telefonica plans to slash its Spanish workforce by about 20 percent over the next three years as it bets on Latin America’s economic growth to win back investors discouraged by Spain’s unemployment rate, the highest in Europe. While revenue from Latin America rose 26 percent, its profit margin in the region slipped 0.5 percentage point to 36.2 percent in the period.
The shares slipped 0.8 percent to 16.84 euros in Madrid today, valuing the company at 76.9 billion euros.