Telecom Italia’s board is expected to reject Egyptian businessman Naguib Sawiris’ proposed capital increase if it decides not to bid for Vivendi’s Brazilian telco GVT.
Franco Bernabe, Telecom Italia’s CEO, told local daily Corriere della Sera…
Telecom Italia’s board is expected to reject Egyptian businessman Naguib Sawiris’ proposed capital increase if it decides not to bid for Vivendi’s Brazilian telco GVT.
Franco Bernabe, Telecom Italia’s CEO, told local daily Corriere della Sera in an interview that the company has not taken part in the GVT sales process, although the asset is of interest to the group. However, a Reuters report today cited sources familiar with the matter as saying Telecom Italia may still make an offer for GVT if Vivendi reduces its price expectations. The French media and telecoms group has hired Deutsche Bank and Rothschild to advise it on the sale and is said to be looking for bids of at least €7bn (US$8.9bn).
Earlier Italian media reports suggested the Milan-based telco may use Sawiris’ proposed investment to help fund a bid for GVT, which French media and telecoms conglomerate Vivendi put up for sale earlier this year. These reports followed confirmation from Telecom Italia that Sawiris was interested in investing in the company via a capital increase, and was seeking to provide it with resources to invest in “growth projects”. Yesterday, Reuters reported that Sawiris had proposed to acquire a significant stake via a €3bn (US$3.89bn) capital increase to be open to all shareholders, which included Spanish telecoms group Telefonica and Telco, a group of three Italian financial institutions.
Comments made by COO Marco Patuano earlier this month suggest Telecom Italia’s decision not to bid for GVT mean it is unlikely to accept Sawiris’ proposal. Patuano said the company’s current business plan does not provide for investments, its main target being deleverage. He added that the company can achieve its debt reduction targets organically, without a capital increase.
Telecom Italia’s board is set to discuss Sawiris’ proposal at a meeting on 6 December.
TelecomFinance understand that if a new business plan, to be presented next February, alters targets and provides for investments like those needed for GVT, the company will reassess its funding options. Sawiris’ proposed investment is understood to be just one option the company would look at.
US DTH broadcaster DirecTV has confirmed its interest in GVT, while Carlos Slim’s Mexico-based telecoms group America Movil is reportedly considering a bid. Brazilian operator Oi recently ruled out a bid for the company.
