Buyout group Apollo International Administration and former SoftBank govt Marcelo Claure are in talks with Millicom Worldwide Mobile a couple of takeover that might worth the Latin American telecoms firm at about $10bn, together with debt, mentioned folks briefed on the matter.

The group is contemplating a bid at a excessive teenagers per share worth, one individual conversant in the matter mentioned. Millicom’s Nasdaq-listed shares closed at $14.83 on Tuesday, valuing the enterprise at roughly $9bn, given its sizeable money owed.

Luxembourg-based Millicom confirmed the talks in a press release on Wednesday, after the Monetary Occasions first reported that Apollo and Claure had partnered for a possible deal.

Millicom mentioned there was no certainty {that a} transaction would materialise.

Shares buying and selling in New York jumped 23 per cent on Wednesday after the FT first reported the potential deal.

Apollo and Claure try to construction their bid in a means that will keep away from them repaying or refinancing about $6.9bn of Millicom’s current money owed, given the turbulence in monetary markets and the massive enhance in rates of interest because the Federal Reserve started tightening coverage final yr.

Banks throughout Wall Avenue are struggling to dump billions of {dollars} in debt tied to personal fairness takeovers, limiting their willingness to jot down massive new loans. The backlog has gummed up the pipeline for newer offers, and dealmakers have warned the upper price of debt has diminished the enchantment of many transactions for leveraged buyout outlets.

Apollo and a consultant for Claure declined to remark.

Apollo’s curiosity in Millicom underscores the funding group’s urge for food to put money into the communications sector, the place it has spent closely lately.

Final yr, Apollo paid $7.5bn to purchase a unit from communications group Lumen Applied sciences. The division, renamed Brightspeed, gives phone and broadband companies to greater than 6mn prospects within the US.

That deal grew to become one of many high-profile takeovers that banks struggled to finance final yr. Underwriters in the end lent Apollo $3.9bn themselves after failing to seek out collectors that have been keen to lend to the enterprise.

Claure additionally has loads of expertise within the telecoms trade, having based cell phone distributor Brightstar within the late Nineties, earlier than promoting the enterprise to Japan’s SoftBank in 2014 for $1.5bn.

He then served as chief govt of US cellular group Dash in a turnround effort that helped earn him a spot contained in the internal circle of SoftBank head Masayoshi Son. Claure was the Japanese group’s chief working officer till his departure last year following a fallout with Son.

Millicom is predicated in Luxembourg however operates predominantly in Latin America below its Tigo model for cellular and cable companies, serving about 50mn prospects. The corporate, led by chief govt Mauricio Ramos, additionally partnered with Visa final yr for its Tigo Cash digital funds product.

On the shut of buying and selling on Tuesday, Millicom’s share worth was down greater than 20 per cent over the previous 12 months, leaving it with a market capitalisation of about $2.5bn. The corporate has a twin itemizing on exchanges in New York and Stockholm.

Millicom’s inventory has been hit by the weak Colombian peso and issues across the firm burning via money through the first 9 months of 2022. A tough macro atmosphere and excessive inflation have raised questions in regards to the group’s skill to hit a three-year target for equity-free money stream.

Millicom was probably the most discounted telecom inventory in Latin America as judged by its enterprise worth towards its working free money stream, in response to a analysis by JPMorgan in November.