Rumours about Vivendi’s plans to increase its stake in Telecom Italia have resurfaced, with Telco shareholders due to meet today to rubberstamp the holdco’s break-up.People familiar with the matter told Reuters that the media powerhouse, which will…
Rumours about Vivendi’s plans to increase its stake in Telecom Italia have resurfaced, with Telco shareholders due to meet today to rubberstamp the holdco’s break-up.
People familiar with the matter told Reuters that the media powerhouse, which will soon receive 8.3% Telecom Italia voting rights from Telefonica as part-payment for its acquisition of Brazilian broadband player GVT, aims to raise its interest to between 10% and 15%.
According to the report, the proposal is still under discussion internally and would need to be approved by the Vivendi board.
In April, Italian daily Il Corriere della Sera suggested that Vivendi chairman Vincent Bollore is looking to up the company’s stake to 30% and pursue a merger with broadcasting giant Mediaset, which is controlled by his long-time friend, former prime minister Silvio Berlusconi.
Telco shareholders – Spain’s Telefonica, Generali, Intesa San Paolo and Mediobanca – which hold a combined 22.4% stake in TI, are expected to start selling their shares as early as next week.
The holdco, set up in 2007 to fight a takeover of Telecom Italia by AT&T and America Movil, has been an unprofitable investment for the shareholders.
Bollore is reportedly keen on securing control of the Rome-based telco and setting its future strategy.
“Bollore wants to be the man determining Telecom Italia’s future,” a person close to the situation was cited saying.
Vivendi, which has exited nearly all its telecoms investments to focus on content production, would benefit from a tie-up with TI to ensure wider distribution of content produced by subsidiaries Universal Music Group and French pay-television operator Canal Plus. Meanwhile, an alliance with Mediaset, which also operates leading Spanish TV network Mediaset Espana, would give the group a chance to expand into Italian and Spanish content.
However, Vivendi CEO Arnaud de Puyfontaine said during an earnings call in mid-May that the company’s stake in TI is “opportunistic”, pointing out that it does not intend to re-enter the telecoms business
Vivendi saw the stake as a way to de-risk the transaction from currency impact, and “an opportunity to create a link with the company”, the CEO said.
Still, he conceded that the company would seize any opportunities that would add value to its media and content business.
TI narrows INWIT IPO price range
Meanwhile, rumours have emerged that the price range for the listing of TI’s tower spin-off Inwit has been reduced to €3.50-3.65 per share from €3.25-3.90 euros per share.
TI launched the IPO last week, saying it would use the proceeds to reduce debt, speed up nationwide fibre deployment, and pursue potential M&A opportunities.
Jonathan Dann, an analyst at RBC Capital Markets, believes TI could generate substantial additional value by combining Inwit with Cellnex Telecom, the towerco listed last month by Abertis.
“A trade sale to Cellnex capturing an upfront bid premium and share of future synergies and expansion by retaining a stake in the newco could generate €600m above those of a simple IPO on our estimates,” he said.
He estimated that 5,000 of Inwit’s 11,500 towers overlap with Cellnex, providing substantial scope for site rationalisation, especially when combined with Inwit’s own organic growth plans.
