Naguib Sawiris Said to Offer to Buy Stake in Telecom Italia

Billionaire Naguib Sawiris, founder of Egypt’s Orascom Telecom Holding SAE (ORTE), offered to purchase a stake in Telecom Italia SpA (TIT), according to a person with direct knowledge of the bid.

The offer is for a minority holding, said the person, who declined to be identified because the discussions are private. Sawiris has “declined to comment about rumors circulating in the media,” Orascom Telecom Media & Technology Holding SAE spokeswoman Manal Abdel-Hamid said by phone from Cairo today. Telecom Italia officials didn’t return calls or e-mails.

Telecom Italia’s management board discussed a bid from Sawiris at a meeting on Nov. 8, Corriere della Sera reported Nov. 10. The offer is for as much as 5 billion euros ($6.4 billion), though the amount the businessman plans to invest wasn’t discussed by management, according to the newspaper.

Buying a stake in Italy’s biggest phone company would see Sawiris increasing his investments in the industry a year after he sold Italian mobile operator Wind Telecom SpA. For Telecom Italia, which is considering a plan to spin off its fixed-line access network, fresh funds may help reduce the burden of debt which has limited the company’s ability to grow.

Telecom Italia on Nov. 9 reported a 13 percent decline in net income to 681 million euros from 786 million euros a year earlier. The company is suffering as competition and the region’s sovereign debt crisis crimp sales and margins.

Shares Drop

The shares gained 2 cents, or 3.7 percent, to close at 69 cents in Milan trading Nov. 9. The stock has dropped 17 percent this year, valuing the Milan-based company at 13 billion euros. The shares traded at a 15-year low of 61 cents on July 24.

Telefonica SA (TEF), Assicurazioni Generali SpA (G), Mediobanca SpA and Intesa Sanpaolo SpA together own about 22 percent of Milan- based Telecom Italia through holding company Telco SpA.

Sawiris offered “slightly” more than 1 billion euros for Telefonica SA’s stake in Telco, an offer that was rebuffed by Chief Executive Officer Cesar Alierta, Il Sole 24 Ore reported on Oct. 16.

Sawiris last year merged Italy’s Wind with VimpelCom Ltd. (VIP) This year, he added gold to his investments after agreeing to buy Canada’s La Mancha Resources Inc. (LMA) The Sawiris family also has interests in construction, fertilizer, cement, real estate and hotel development.

To contact the reporter on this story: Elisa Martinuzzi in Milan at

To contact the editors responsible for this story: Edward Evans at;

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