Egyptian tycoon Naguib Sawiris has said he is still interested in acquiring a stake in Telecom Italia (TI) provided the Italian incumbent keeps its stake in TIM Brasil. Another pre-requisite includes Telefonica exiting TI, Sawiris reportedly…
Egyptian tycoon Naguib Sawiris has said he is still interested in acquiring a stake in Telecom Italia (TI) provided the Italian incumbent keeps its stake in TIM Brasil. Another pre-requisite includes Telefonica exiting TI, Sawiris reportedly commented.
In an interview with Bloomberg, Sawiris declined to say how much he would be willing to invest in the telco, but added that it “still needs a massive €3bn to €4bn capital increase”.
In 2012, Sawiris said he was prepared to invest up to €3bn in TI but his offer was rejected by the company’s board. In September 2013, the billionaire said he was reconsidering a potential investment in TI. However, Spanish incumbent Telefonica subsequently agreed to increase its stake in the Milan-based carrier via holding company Telco.
In the recent interview, Sawiris said he believes it does not make sense for TI to sell its 67% stake in TIM Brasil as this would make it a purely domestic carrier. He added he would be interested in making an offer for the TIM Brasil stake if TI does decide to sell.
TI CEO Marco Patuano has repeatedly described the TIM Brasil stake as a “strategic asset” but the telco’s board decided earlier this month to conduct an “in-depth analysis” of the unit. Board directors also decided to work out a procedure “to manage any possible extraordinary operation” involving its investment in TIM Brasil. Telefonica, which owns telco Vivo in Brazil, is under pressure from Brazilian regulator Cade to reduce its influence in the company. In December, Cade said Telefonica must either reduce its stake in TI, thereby reducing its sway over TIM Brasil, or find a new partner to take joint control of Vivo.
Sawiris was cited in the recent interview as saying he is not considering an unsolicited bid for TIM Brasil and has not held talks with either TI or Telefonica.
Bernstein Research analysts are unconvinced by Sawiris’ revived interest in TI, doubting whether he has the money to buy all of the telco.
The analysts also disagree with Sawiris’ claim that TI needs a rights issue, saying the telco should return to a net debt/EBITDA ratio of 2x by 2016, even without a TIM Brasil sale.
Meanwhile, Reuters quoted Patuano on the sidelines of a recent event as saying he is unaware of Sawiris’ potential interest in TI, adding that he has only read about it in the newspapers.
Patuano also reportedly dismissed media report claiming TI might consider a capital increase to help cut debt, saying there are no such plans for such a move.
