Telecom Italia fails to reach deal, reportedly mulls sale of mobile towers

Telecom Italia CEO Franco Bernabe and core shareholders met after all on Thursday despite saying earlier that they had postponed talks until October, but a deal on the future ownership of the debt-laden Italian operator remains elusive.

Reuters reported that Bernabe and Italian shareholders in the Telco partnership arranged a hasty meeting in an attempt to hammer out some kind of strategy for the troubled operator, but shareholders are less than keen to invest good money after bad and are still exploring the option of selling their shareholdings to Telefónica, the main shareholder in Telco.

Italian partners in Telco, which owns 22.4 per cent of Telecom Italia, include Generali, Mediobanca and Intesa Sanpaolo and have until September 28 to decide if they want to exit the pact and sell their stakes. The pact would otherwise run until 2015. It was previous reported by Italian daily Il Sole 24 Ore that the shareholders have already rejected an €800 million ($1.08 billion) offer from Telefónica for their stakes.

"The situation is still in flux and no decision has yet been taken on the shareholder structure," one unnamed source close to the talks told Reuters. "The meeting on Oct. 3 will be decisive."

According to Reuters, Bernabe wants investors to commit to an investment plan that could be worth around €3 billion ($4 billion) in an effort to reverse the operator's fortunes and prevent its debt rating falling into junk territory. Telecom Italia needs a capital increase of at least €3 billion to avoid a cut to junk, Andrea Giuricin, an analyst at Milan Bicocca University, told Bloomberg earlier this month.

Analysts note that the door could be now open to a foreign investor, with AT&T, Egyptian tycoon Naguib Sawiris and cash-rich Vodafone seen as possible predators.

Meanwhile, Bloomberg reported that, according to an unnamed source, Telecom Italia is considering a sale of its mobile towers, which could be valued at around €500 million to €1 billion. Other options tabled at the meeting on Thursday are reported to have included proposals to create separate companies for the operator's consumer and business services.

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

Related Articles:
Telecom Italia's future ownership remains up in the air
Report: Sawiris eyes Telecom Italia again
Report: Telecom Italia could face takeover bid this year
Telecom Italia wins EU reprieve over fixed-line fee cuts
Telecom Italia teeters on edge after spin-off plan put on hold

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