Telecom Italia is considering a renewed bid for dark fibre operator Metroweb, executive chairman Giuseppe Recchi has told journalists. The incumbent holds out hope that the Milan-based provider could become the centrepiece of its own national high-speed broadband roll-out.
Telecom Italia (BIT:TIT) is considering a renewed bid for dark fibre operator Metroweb, executive chairman Giuseppe Recchi has told journalists. The incumbent holds out hope that the Milan-based provider could become the centrepiece of its own national high-speed broadband roll-out.
On 16 October, management will seek a mandate from the board to make an initial offer, Recchi (pictured) said. Telecom Italia would offer to buy a 40% stake, with a view to purchasing the remaining 60% within five years, according to confirmed newswire reports.
Telecom Italia last year gave CEO Marco Patuano a mandate to explore an acquisition of the majority stake owned by F2i, but this fell apart because the incumbent wished to exclude other telcos and own the resulting network.
This May, Metroweb, Wind Telecommunicazioni and Vodafone (LSE:VOD) signed a letter of intent to create a newco aimed at deploying a national broadband network, but have since gone quiet on the subject. In the meantime, Wind and CK Hutchison-owned Three have agreed a €21.8bn joint venture, and the Italian government has started releasing part of the funds earmarked for its €12bn national broadband project.
Because of these market changes, Cassa Depositi e Presititi (CdP) and F2i, both state owned, have decided to renew conversations with other market players including Telecom Italia, which has reportedly received a letter from them removing any ownership restrictions.
Metroweb is owned by Fastweb (10.6%) and Metroweb Italia (87%), which is itself owned by infrastructure fund F2i (54%) and CDP’s Fondo Strategico Italiano (46.2%). F2i’s stake was last year assigned a valuation of €300m.
While Bloomberg suggested that the offer would be in cash, Telecom Italia is not thought to have decided definitively how it would finance any bid – although it does have available liquidity.
In 2011, Intesa Sanpaolo-owned IMI Investimenti and F2i acquired Metroweb from A2A and Stirling Square Capital Partners, valuing the company at €436m (US$628m), or an enterprise value of over 10x EBITDA.
The meeting will mainly cover Metroweb as well as governance, while it is possible that discussions around TIM Brasil could also continue although it is understood that these are not “officially” on the agenda.
Following a September board meeting in Rio de Janeiro, the company declared that it intended to remain in the country. That subsidiary, long considered a takeover target, is now seen as a partner for domestically owned Oi. This week, Telecom Italia issued a statement saying it was not holding merger talks with Oi, following a report in Valor Econômico. According to that report, Oi’s financial adviser BTG Pactual had held talks with Russian investment fund LetterOne and Telecom Italia about a merger worth up to R$50bn (US$13.4bn).
Inwit, Telecom Italia’s partly spun-off towerco, which may play a role in broader domestic tower consolidation, is not on the agenda, Recchi has said.
French media conglomerate Vivendi this week upped its ownership of Telecom Italia to 19.9%.
