7. How was Telmex privatized?
In December 87, Telmex was worth a little more than 600 million dollars. Its value increased significantly in the year it was privatized, actually since 88, and in 89 it practically doubled and the following year it increased more than two hundred and twenty percent and it continued to increase in the 90s.
When the bid was made the company’s market value was 1.387 billion U.S. Dollars and the bid price was 8.615 billion dollars, 16.6% higher than that day’s the market price. In November we still saw a slight increase from 7.387 to 7.552. After the bid, in December, it dropped to 7.273 despite the fact that during the year the entire company increased 95%, from 3.730 billion to 7.273 billion dollars
Thus 20.4 per cent, the company’s control, was privatized. Therefore 1.710 billion dollars were paid. People say that Telmex was bought in 1.720 billion dollars when actually 20.4 per cent of that price was bought. It was the company’s control, 20.4 per cent.
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