Mediaset-controlled towerco EI Towers has dropped plans to acquire state-owned rival Rai Way amid political opposition to the deal.
In a statement on Friday, the company, which is 40% owned by former prime minister Silvio Berlusconi’s Elettronica…
Mediaset-controlled towerco EI Towers has dropped plans to acquire state-owned rival Rai Way amid political opposition to the deal.
In a statement on Friday, the company, which is 40% owned by former prime minister Silvio Berlusconi’s Elettronica Industriale, itself a subsidiary of the Mediaset group, said it withdrew its merger filing with competition authority AGCM.
A number of market observers have told SatelliteFinance that, while a merger between EI Towers and Rai Way makes perfect strategic sense, it is unlikely to take place in the short term, pointing to widespread government opposition.
Market regulator Consob had earlier suspended its deal review, saying it could not proceed unless EI Towers filed a new offer document, following the operator’s decision to reduce the minimum stake threshold for its bid from 66.67% to 40% to secure regulatory approval.
The watchdog also pointed out that by reducing its stake in the proposed target to 40%, the bidder would fail to secure enough control to implement its business objective − creating a single national tower operator, given that Rai Way’s parent Rai might not support this plan.
State broadcaster Rai, which describes its 65.05% stake in the listed towerco as strategic, said in a statement it would not accept EI Towers’ offer “by any measure” and does not intend to delist the company, as the bidder had proposed in its tender document.
The government also repeatedly opposed the project arguing that, due to the strategic importance of network infrastructure, it must retain a minimum 51% stake.
One commentator suggested that Rai’s statement should be interpreted as a political vendetta against Berlusconi, who in 2001 opposed Crown Castle’s US$380m bid for 49% of Rai Way, since it would have harmed Mediaset.
Given that the chances of reviving the deal are very unlikely, both Rai, which said it would be open to M&A opportunities, and EI Towers could now turn their attention to Telecom Italia (TI)’s tower spinoff Inwit, which is due to list by June, with TI retaining a 60% stake, analysts said.
