Report: Sawiris eyes Telecom Italia again

Egyptian billionaire Naguib Sawiris has been circling the Italian telecoms market in recent months, and fresh reports suggest he is again in touch with Telecom Italia, even though previous efforts to buy the incumbent have failed.

Reuters reported that, according to unnamed sources, the operator has made contact with Sawiris as well as AT&T, while Telefónica is also seen as an interested party because it owns the largest share in Telco, which controls 22.4 per cent of Telecom Italia. América Móvil was also cited as an interested party but has now denied any involvement.

According to Bloomberg, Telecom Italia is considering a new ownership structure as controlling shareholders are allowed to exercise a right to end the six-year Telco pact this month. Italian investors in Telco include Mediobanca, Assicurazioni Generali and Intesa Sanpaolo. Previous reports have said they would be interested in selling their shares.

Reuters reported that the board of Telecom Italia is meeting on Sept. 19, and its chairman and CEO Franco Bernabe is seeking a new investor ahead of the meeting. The news agency added that shareholders have previously rejected two merger plans that Bernabe brought to the board: a proposal last year of Sawiris taking a stake through a €3 billion ($3.94 billion) capital increase, and a merger with Hutchison Whampoa's Italian mobile unit.

"Whatever is decided, if there is anything to be decided, will be discussed at the appropriate time and namely at the board meeting of September 19 of Telecom Italia and the following ones. So there will be lots of time to discuss," Bernabe he told reporters at the sidelines of a GSMA conference in Brussels.

Telecom Italia is in dire need of further capital or a strong partner after rating companies put its debt under review for a possible downgrade to junk.

"A big international main partner such as Sawiris or also Telefónica could make the company more international, diversifying its business in other markets," Andrea Giuricin, a media and telecommunication analyst at Milan Bicocca University, told Bloomberg. "In the next three months, Telecom Italia needs a capital increase of at least €3 billion to avoid rating companies downgrading its debt to junk," Giuricin added.

Quoting Italian newspaper Il Messaggero, Reuters said the Italian government would prefer a merger between Telecom Italia and Spain's Telefónica, rather than a deal with Sawiris.


For more:
- see this Reuters article
- see this Bloomberg article
- see this separate Reuters article

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