The companies agreed to present a single offer to minority shareholders and Telecom Italia SpA, which owns about 67 percent of TIM Participações, Brazil's No. 2 wireless carrier, said the first source, who requested anonymity as the deal is still in the works.
A bid could be presented within two weeks, both sources noted. The first source said Oi, America Movil and Telefonica are confident their offer won't meet too much resistance from antitrust and industry watchdogs in Brazil. The bid implies a 5 percent premium for controlling and minority shareholders of TIM, the first source noted.
Telecom Italia, whose board meets on Nov. 6 to examine its quarterly results, had yet to receive any offer for TIM, Chairman Giuseppe Recchi said on Friday. The Rome-based company has repeatedly said Brazil remains a strategic market, but it would consider selling TIM if a highly priced offer is made.
The bid follows a year of speculation that intense competition, stagnant sales and the rising cost of new technology would hasten consolidation efforts in Brazil's telecommunications market.
Shares of Oi posted their biggest intraday jump in six years on the news, which was first reported by Brazilian newspaper Folha de S. Paulo. TIM Participações jumped as much as 18 percent.
If the bid is successful, the three companies would then proceed to split TIM, the first source noted. Breaking up TIM would give the joint bidders more breathing room in Brazil's crowded four-way mobile market as they struggle to add customers, invest in high-speed networks and protect profits in a stagnant economy.
Under the deal, America Movil would keep 40 percent of TIM's business, Oi would take 28 percent and Telefonica about 32 percent, the first source said. America Movil, controlled by Mexican billionaire Carlos Slim, confirmed in September it planned to join talks with Oi to make a joint bid for TIM.
A third source told Reuters on Friday that Telefonica joined talks to bid for TIM Participações in recent days. Still, the Madrid-based company has repeatedly said its sole focus is to integrate Brazil's GVT SA, a fixed-line and Internet broadband services firm it bought in August, into its platform.
Shares of Telecom Italia gained 4.1 percent in Milan. Telefonica rose 2.6 percent, while Telefonica Brasil SA, its Brazilian subsidiary, jumped 6.5 percent in São Paulo. America Movil added 1.4 percent in Mexico City.
Oi closed 13 percent higher on Friday, while TIM Participações gained 15.3 percent.
Investment banking firm Grupo BTG Pactual SA is handling the transaction.
America Movil, BTG Pactual, Oi and representatives for Telefonica in Madrid and São Paulo declined to comment. TIM Participações said it is unaware of any takeover bid.
Telefonica's Brazil unit, Telefonica Brasil SA, said in a securities filing that is not inviolved in any talks related to the TIM Participações joint bid.
(Additional reporting by Brad Haynes in São Paulo, Alberto Sisto in Rome, Julien Toyer in Madrid and Tomás Sarmiento in Mexico City; Editing by Lisa Von Ahn, Chizu Nomiyama, Alan Crosby and W Simon)
By Guillermo Parra-Bernal and Danilo Masoni
