Rumour Mill: Telecom Italia readies bid for 3 Italia

Italy's largest telco, Telecom Italia (TI), is poised to make a bid to acquire 3 Italia in a deal that values the Hutchison-owned mobile operator at around €4.3 billion.

A report by Corriere Della Sera, quoting unnamed sources, claims that Goldman Sachs and Bank of America Merrill Lynch have been hired without an official mandate to put the deal together.

Spokespeople from Telecom Italia and 3 Italia, however, have declined to comment, although TI's shares were trading up 1.4 per cent following the report, valuing TI at nearly €16 billion.

3 Italia has been the centre of past speculation when its CEO, Vincenzo Novari, told the Italian newspaper Il Sole 24 Ore in late 2008 that merger talks were underway with TI. While the deal might have been stopped due to competition worries, Novari later admitted the two firms had failed to agree on a price.

More recently, Naguib Sawiris, the Egyptian billionaire known for his adventurous approach to business, was reported by Bloomberg as saying that Wind Telecoms is "open to a possible integration" with a telephone company in Italy.

"We have [an] appetite to grow our business. We believe there [are] synergies, but until there is something concrete we cannot say anything more than that," Sawiris said last month. "There is nothing concrete right now."

Hutchison has confirmed that its 3 Group broke even during the last six months of 2010 after a decade-long struggle to move into the black, according to Reuters. 3 Italia comes a distant fourth in the Italian mobile operator rankings, with just over 9 million customers, behind Telecom Italia Mobile with over 31 million, Vodafone with 30 million and Wind with 20.5 million.

For more:
- see this Corriere Della Sera article (translated via Google Translate)
- see this Bloomberg article
- see this Telegeography article
- see this Reuters article

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