Italian state broadcaster Rai would not accept EI Towers’ €1.2bn (US$1.4bn) offer for its tower unit Rai Way “by any measure”, although it remains open to M&A opportunities, the company said in a statement.
Rai, which holds a 65.05% stake in…
Italian state broadcaster Rai would not accept EI Towers’ €1.2bn (US$1.4bn) offer for its tower unit Rai Way “by any measure”, although it remains open to M&A opportunities, the company said in a statement.
Rai, which holds a 65.05% stake in the listed towerco, pointed out that it considers its stake in Rai Way as strategic, and does not intend to delist the company, as EI Towers had proposed as part of its offer.
“Rai’s management board has therefore reiterated the importance of Rai Way’s industrial project, based on the consolidation of its market position, also via external growth opportunities and M&A transactions, in compliance with the applicable legal and regulatory framework and the restrictions originating from the fulfillment of public interests”, the broadcaster said.
Last week, EI Towers, which is 40% owned by former prime minister Silvio Berlusconi’s Elettronica Industriale, itself a subsidiary of the Mediaset group, had agreed to reduce the minimum stake threshold for its bid from 66.67% to 40% in order to secure regulatory approval for the deal.
However, market regulator Consob suspended its bid review, saying that it could not proceed unless EI Towers filed a new offer document. 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 the business objective − creating a single national tower operator, given that Rai Way’s majority shareholder Rai might object to such project.
The government also repeatedly opposed the project arguing that, due to the strategic importance of network infrastructure, the state must retain a minimum 51% stake in Rai Way.
A number of Italian analysts and observers, who do not wish to be named, told TelecomFinance that the opposition of the deal from Rai, the regulators and the current government is exclusively politically motivated.
One commentator went as far as saying that Rai’s latest statement needs to 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 reportedly harmed Mediaset.
A bid for Inwit on the horizon?
Market observers agree that a merger between EI Towers and Rai Way would make perfect sense strategically but, since Rai seems unwilling to negotiate a deal, it is unlikely to happen in the short term.
According to them, Rai’s statement shows that the company would rather play an active role in the consolidation process of the Italian infrastructure sector and might launch a counter offer for EI Towers, acquire smaller operators or bid for Telecom Italia (TI)’s tower spinoff Inwit, which is due to be listed by June, with TI retaining a 60% stake.
EI Towers itself is likely to bid for Inwit, should not be able to reach an agreement with Rai Way.
The Lissone-based towerco, which in its latest strategic plan expressed a firm interest in growing via M&A, could also scout for overseas targets, although such option would be less attractive, due to lack of significant synergies and the fact that it holds broader broadcast interests in Italy via Mediaset.
