Analyst Note| Michael Hodel, CFA |
Millicom announced that it will acquire the 45% stake in its Guatemalan business that it doesn’t already own for $2.2 billion. The transaction brings full control of the firm’s largest operation and greatly simplifies its reporting structure. Because Millicom evenly split operating control with its partners in Guatemala, it hasn’t consolidated the business in its financial results, creating a messy and often confusing situation. The price paid looks reasonable to us, and we don’t expect to materially change our $64 fair value estimate and continue to believe the stock is undervalued.