Niel ups his offer for Millicom to $4.4 billion

The businessman's Atlas Luxco investment vehicle has tabled a $25.75 per share offer for Millicom, it revealed in a statement late last week. That values the company at $4.4 billion, according to Bloomberg. It's a moderate uplift on the $24 bid it lodged a month ago, which was immediately decried as being too small by Millicom's board.

The new offer comes as something of a surprise, but clearly Atlas has not given up on its quest to take the Latin American operator group private just yet. Thus far there has been no formal response from Millicom, which is quite telling given that it was much quicker out of the blocks when the first offer landed. There is likely some debate happening behind the scenes.

For its part, Atlas – understandably – gave little away on its rationale for the new offer, instead sticking to what it believes are the benefits of the deal for Millicom shareholders. The increased offer will not have an impact on the timeline of the process, Atlas confirmed, and any shareholders who have already tendered their shares will automatically qualify for the new price. As such, the acceptance period will still run until 16 August.

Atlas detailed the various premiums the new offer represents over Millicom's recent share and SDR prices, including the fact that it is higher than the telco's share price for the two years to 22 May, the last day of trading before market speculation kicked in. That speculation means that Millicom is now trading at close to $26 and has exceeded the $25 mark a couple of times in the last six weeks.

Those past few weeks have witnessed a number of fairly big announcements from Millicom. The group updated its financial forecasts, in a bid to persuade shareholders that it is worth more than Atlas' initial offer, and shared details of two potential M&A deals.

Last week the operator disclosed that it is in talks to buy Telefonica's operations in Colombia for $400 million, and that it will also look to buy out the state's holding too. It is also working on a plan to take sole control of its Tigo UNE unit in Colombia, raising its overall spend in the market to around $1 billion in cash and assumed debt.

Almost immediately it followed up with the revelation that it has brokered a deal to combine its operations in Costa Rica with those of Liberty Latin America, leaving it with a 14% stake in the merged entity. The merger will enable the companies to accelerate fibre network development in the country, they said. The deal needs the regulatory green light, but the firms said they expect to get it over the line before the end of the year.

With a 29.03% stake in Millicom, Atlas is already pretty close to the action, so it seems unlikely that these deals specifically are responsible for triggering the new offer. The timing of the new bid also coincided with the publication of Millicom's Q2 results, which showed growth in revenues, earnings and cash, and significantly reduced leverage. The numbers certainly help to back up Atlas' decision to pay more, but may or may not have been instrumental in bringing about the new offer.

And with Millicom keeping its counsel, at least for now, it's difficult to comment on Atlas' likelihood of success. We can be pretty sure that the firm will not overpay though, so chances of this being just the latest in a series of bids are very slim.