UPDATE: Stifel Downgrades TIM Participacoes SA Following Recent Run

In a report published Wednesday, Stifel analyst Christopher King downgraded the rating on TIM Participacoes SA (NYSE: TSU) from Buy to Hold, and removed the $25.00 price target.

In the report, Stifel noted, “Following TSU's 9.9% run-up yesterday (S&P500 down 0.3%) and a 25% increase MTD (S&P500 up 3.9%), we are lowering our rating on the shares to Hold as the stock has exceeded our target price. The move by Telefonica SA (TEF) and a group of Italian partners to allow Telefonica to gradually take control of Telco, the largest shareholder in Telecom Italia SpA (TI), is responsible for most of the recent outperformance, in our view. Under terms of the deal announced this week, Telefonica will boost Telco's capital and hold an option to buy the rest of it next year. Telefonica will immediately pay 324 million euros ($438 million) in cash to buy new non-voting shares of Telco, lifting its ownership stake to 66% from 46%, according to statements from Assicurazioni Generali SpA (G.MI), Intesa Sanpaolo SpA (ISP.MI) and Mediobanca SpA (MB.MI), all of which will remain junior Telco shareholders.”

TIM Participacoes SA closed on Tuesday at $25.41.