Telecom Italia's future ownership remains up in the air

The chatter around the future shareholder structure of Telecom Italia reached fever pitch this week, as rumours suggested core domestic shareholders in the Italian operator recently rejected an €800 million ($1.07 billion) offer from Telefónica to buy part of their stakes in the Telco partnership, which holds a blocking minority of 22.4 per cent in Telecom Italia.

The difficulty of the situation was further underlined by Telecom Italia's decision to postpone a strategic board meeting planned for Sept. 19 until Oct. 3, according to Reuters. The meeting was expected to discuss an offer from Telefónica--the largest shareholder in Telco--to buy out domestic shareholders including Italian banks Intesa Sanpaolo and Mediobanca and insurance company Generali.

Telecom Italia is seeking a new shareholder structure that could revive its fortunes after years of underperformance, and help reduce its debt of almost €29 billion. The core Italian shareholders recently signaled they are interested in selling their stakes, and are allowed to exercise a right to end the six-year Telco pact this month.

Telecom Italia  CEO Franco Bernabe is racing against time to avoid the company's debt rating from falling into junk territory, although the board has already rejected previous approaches by Hong Kong-based Hutchison Whampoa and Egyptian billionaire Naguib Sawiris, who is believed to still be interested in investing in the operator.

Italian newspaper Il Sole 24 Ore reported that core Italian shareholders this month rejected an €800 million offer from Spain's Telefónica to buy part of their stakes. Reports from Reuters said that, according to unnamed sources, controlling shareholders are still in talks with Telefónica and other interested parties to buy their stakes.

Bloomberg also noted that directors including representatives from Telco still plan to gather informally on Sept. 19 to review the new business plan as well as the Telco shareholder agreement.

Representative for Telecom Italia and Madrid-based Telefónica declined to comment, according to Bloomberg.

Meanwhile. Mediobanca cut the value of its holding in Telecom Italia by more than half, Bloomberg reported. The bank holds an indirect stake of 2.6 per cent via Telco. Mediobanca does not intend to invest more in Telecom Italia, CEO Alberto Nagel told Bloomberg, also suggesting that Generali should leave Telco.

"Mediobanca's writedowns make Telecom Italia even more attractive for potential international investors who would buy a strategic asset in a strategic country like Italy," Massimiliano Trovato, a media and telecommunications analyst at Bruno Leoni Institute, told Bloomberg.

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

Related Articles:
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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