Italian tower operator EI Towers might consider reviewing the terms of its recent offer for state-owned rival Rai Way, as long as any amendments “have no effect on the project’s industrial value and financial return”.
In a statement filed yesterday…
Italian tower operator EI Towers might consider reviewing the terms of its recent offer for state-owned rival Rai Way, as long as any amendments “have no effect on the project’s industrial value and financial return”.
In a statement filed yesterday in response to a request by the Italian competition authority to provide additional information on the proposed bid, the Mediaset-controlled towerco said it is reviewing “the possibility of waiving one or more of the above conditions precedent in the offer, as well as amending them, in whole or in part, where possible”.
Analysts suggest the parties could reach an agreement by reducing their respective stakes in the combined entity or involve other investors.
“From a strategic point of view, a merger makes perfect sense,” one Italian analyst said.
The company stressed that the deal would create significant synergies, and pointed to European examples of single operators, such as Abertis-owned Retevision in Spain, TDF in France and Arqiva in the UK, to back up its thesis.
EI Towers also pointed out that the timing of its offer was influenced by Wind Telecomunicazioni’s recent sale of its tower portfolio to Spanish infrastructure fund Abertis for €693m (US$S$774.2m).
The towerco had also placed a bid for the assets but was outbid by Abertis, reportedly over improved valuation.
“It is no coincidence that just a few days ago the first mobile telecom infrastructure spin-off in Italy by Wind strengthened the role as buyer in Italy of Abertis Group, the manager of the sole television infrastructure operator in Spain,” the company said.
In 2001, the Italian government at the time shot down an attempt by US telco Crown Castle to buy 49% of the group for US$380m.
A person familiar with the situation told TelecomFinance that the then Berlusconi-led government rejected the deal for political reasons.
“The deal had already been signed but the government blocked it at the last minute because it would have harmed Mediaset,” the person said.
Analysts positive on deal outcome
A number of Italian analysts who do not wish to be named argued that things could go differently this time, although the government’s scepticism on the deal represents a major hurdle.
According to an observer, what differs from 2001 is that RaiWay is now a publicly-traded company, and that its parent, Rai, is in need of cash as its financial position has deteriorated over the past few years.
Last week, EI Towers, which is 40%-owned by Berlusconi’s Elettronica Industriale, launched a €1.2bn (US$1.4bn) tender offer to acquire Rai Way in a cash-and-stock deal, conditional upon the acquisition of at least 66.67% of its share capital.
However, the economic development ministry nixed the deal saying that the government must own no less than 51% of the group because of the “strategic importance of network infrastructure”.
EI Towers shareholders are due to vote on the offer at an extraordinary meeting on 27 March.
The towerco’s remaining shares are held by BlackRock (10.25%), Octavian Advisors (4.13%), Threadneedle Asset Management (2.019%) and Amber Capital (2.018%).
