Sawiris eyeing stake in Telecom Italia

In an emailed statement to Reuters, Naguib Sawiris the former owner of Mobinil telecom in Egypt, said he was considering a “potential investment in Telecom Italia” but might not submit a proposal “in view of (Italy’s)… alleged preference for Telefonica reported in the Italian press.”

Telecom Italia is Italy’s largest fixed-line operator however is has been struggling with a €29 billion debt and shrinking margins in its Italian market but owns valuable assets in Brazil and Argentina.  It is currently controlled by a group of investors that own 22.4 percent through corporate holding Telco, with Spanish peer Telefonica the biggest shareholder. Speculation in Italy is that the Italian government would prefer a merger between Telefonica and Telecom Italia rather than be subject to a foreign takeover.

Telecom Italia declined to comment on Sawiris’ statement.

Sawiris offered to inject €3 billion into failing Telecom Italia, a proposal that was rejected by the company’s board and has not officially submitted a new offer since.

Telecom Italia shareholders have also rejected a recent merger offer from Hong Kong-based Hutchison Whampoa, mainly due to differences over valuation.

“There is a commitment by the (Telecom Italia) chairman (Franco Bernabe) to present a plan and options by September 19,” Enrico Cucchiani, CEO of Telecom Italia investor IntesaSanpaolo told Reuters in a TV interview.

“We are open to all options that make strategic sense for the company” Regarding Intesa’s Telecom Italia, stake, he added.

Italian insurer Generali, another core investor in Telecom Italia, said it was willing to sell its stake to focus on the insurance business but would decide on the timing on any potential sale after the board meeting.

“When we move out will depend very much on what we hear from the board on September 19 in terms of strategy” and ways to improve valuation, Generali Chairman Gabriele Galateri told Reuters.

Telco shareholders have up until September 28 to decide whether they want to exit a shareholder pact. Investment bank Mediobanca has said it is prepared to sell after writing down its stake to around current market value.

Telefonica, Generali and IntesaSanpaolo risk a negative impact if they sell their stakes at market price as they have booked the investment at twice the current share value.

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