MADRID/MILAN (Reuters) - Spain's Telefonica denied on Monday that it was involved in looking at making a joint offer for Telecom Italia's Brazilian wireless network operator TIM Brasil.
Shares in Telecom Italian were lifted on Friday by an Italian press report saying Telefonica was looking to set up a vehicle with Brazilian market rivals America Movil and Oi to take over TIM Brasil and break it up.
"Telefonica would like to clarify that it is not part of any such vehicle and it has no details of any kind on any such potential transaction to disclose to the public for market evaluation," the Spanish telecoms company said in a statement to Spain's stock market regulator.
Telefonica added that it had not had any specific contact with Brazil's competition watchdog Cade over such a deal.
Shares in Telecom Italia were down 0.9 percent at 0.7510 euros by 0822 GMT on Monday, when Telefonica was up 0.6 percent at 11.74 euros.
Telefonica owns 15 percent of Telecom Italia through investment vehicle Telco and late last year secured an option to gradually take over the stakes of its partners in Telco, a group of Italian financial institutions.
The move to take over Telco concerns the Brazilian authorities because Telefonica controls local mobile network operator Vivo.
Cade ruled in early December that Telefonica must exit its direct and indirect stake in TIM Brasil or reduce its stake in Vivo - a business which Telefonica regards as strategic, people familiar with the Spanish group's plans told Reuters last month.
Those sources also said that Telefonica aimed to break up TIM Brasil and divide its assets and networks between itself and the two other Brazilian mobile phone operators.
Telefonica said again on Monday that it was looking at the possibility of taking legal action against Cade over what it described as the "unreasonable" remedies proposed.
(This refiled version of the story replaces pronoun "it" with "Telefonica" in seventh paragraph)
(Reporting by Sarah White and Valentina Za; Editing by Elizabeth Piper and Greg Mahlich)