Telecom Italia’s (TI’s) board of directors is set to meet tomorrow (4 July) to discuss the potential tie-up with Hutchison Whampoa’s 3 Italia amid widespread doubt that a deal will eventuate.
A spokesperson for the Italian incumbent confirmed that…
Telecom Italia’s (TI’s) board of directors is set to meet tomorrow (4 July) to discuss the potential tie-up with Hutchison Whampoa’s 3 Italia amid widespread doubt that a deal will eventuate.
A spokesperson for the Italian incumbent confirmed that the company’s talks with Hong Kong-based Hutchison are on the agenda for tomorrow’s meeting, but was unable to comment further.
A Hutchison spokesperson declined to comment at all on the matter.
A tie-up deal could see Hutchison become TI’s largest shareholder, which media, analysts and market commentators have speculated is controversial politically and with existing investors, including current largest shareholder Telco. Telco is made up of Spanish telecoms group Telefonica and several Italian financial organisations.
Bloomberg cited four unnamed sources as saying talks between TI and Hutchison have stalled and there has been no agreement upon valuation. The report cited two of the sources as saying TI directors will most likely decide at tomorrow’s meeting to halt the project. They reportedly added that executives want to focus on the planned spinoff of fixed-line assets into a new company, which the board approved in late May.
The Milan-based telco first confirmed it was in preliminary talks with Hutchison in early April and, in June, the board authorised an in-depth examination of the potential transaction. An internal committee advised by Credit Suisse recommended the examination be completed within 30 days. The board was expected to discuss the matter at a meeting in early June but released a short statement afterwards saying it had postponed doing so until a later, unspecified date.
Taking part in a Q&A at the Italian Senate today, TI CEO Franco Bernabe said the planned spinoff will not take place before there is a clear regulatory framework, saying the plan is in the hands of the Italian regulator. Bernabe said state-controlled Cassa Depositi e Prestiti (CDP) is free to invest in the new company, but denied rumours that TI is seeking state intervention for the spinoff.
