Members of Telecom Italia’s largest shareholder Telco expect the incumbent’s board of directors to provide details of its “preliminary contacts” with Hutchison Whampoa about a potential tie-up at its meeting tomorrow.
Telco members – Spain’s…
Members of Telecom Italia’s largest shareholder Telco expect the incumbent’s board of directors to provide details of its “preliminary contacts” with Hutchison Whampoa about a potential tie-up at its meeting tomorrow.
Telco members – Spain’s Telefonica and Italy’s Intesa Sanpaolo, Assicurazioni Generali and Mediobanca – are meeting in Milan today to discuss how they will vote at TI’s AGM next week, a person with knowledge of the matter confirmed.
While it will be their first meeting since TI and Hong Kong-based Hutchison, owner of mobile operator 3 Italia, announced they are in contact about a “possible integration”, the person said the topic is not on the meeting agenda as they have no details about it. Telco members hope the TI board will provide such details and clarify media rumours at tomorrow’s meeting.
Telco, which has a 22.4% stake in Milan-based TI, issued a statement yesterday saying it has had no contact of any nature – even informally – with either TI or Hutchison about their tie-up talks, announced earlier this month.
Yesterday, Bloomberg cited two people with knowledge of the matter as saying Telefonica is prepared to sell its indirect 10.5% stake in Telecom Italia as the companies have failed to generate synergies. However, they noted that Telefonica, which owns 46.2% of Telco, has not yet taken a final decision on the matter.
Telefonica declined to comment on the report.
Mediobanca is also open to selling its stake in TI. The investment bank told analysts during a February conference call that it plans to reduce the equity stake it holds in TI via Telco. However, the bank is eager to ensure that it sells the stake to an investor it believes will guide the telco in the right direction.
Meanwhile, Reuters cited unidentified sources familiar with the situation as saying TI chairman Franco Bernabe will request a mandate at tomorrow’s board meeting to step up talks with Hutchison, said to be eyeing a stake of up to 29.9% in the company.
While TI and Hutchison have not commented on the form a potential deal could take, Italian newspaper Il Messaggero yesterday cited an MoU from Hutchison chairman Li Ka-shing to Bernabe as saying the company is prepared to pay for a stake in TI with 3 Italia shares and cash. The cash component of the deal would value TI shares at €1.20 each, the report stated, noting that they could be acquired from Telco, fellow shareholder Findim or via the open market.
Yesterday, Telecom Italia issued a short statement reiterating that tie-up talks with Hutchison are at a “preliminary and non-binding” stage.
Any such deal would face antitrust hurdles and analysts have noted that remedies would almost certainly be required.
