Telecom Italia SpA’s (TIT) board will review the feasibility of a merger with Hutchison Whampoa Ltd. (13)’s Italian business at its next meeting, said Marco Patuano, chief operating officer of Italy’s biggest phone company.
“The H3G issue will be examined at the next board meeting,” said Patuano, speaking to reporters in Rome today at the Bank of Italy’s annual meeting. Directors of the carrier will meet June 5 in Milan, according to a person familiar with the matter, asking not to be identified because the meeting schedule isn’t public.
Telecom Italia’s board yesterday approved a plan to separate the carrier’s fixed-line network, setting a precedent for Europe’s indebted phone companies as they look for new ways to raise funds and bargain for lighter regulations. Directors also authorized executives to continue talks to sell a stake in the new company to state lender Cassa Depositi e Prestiti.
Spinning off the access network will give Telecom Italia “greater flexibility to explore all the available options in order to strengthen its position,” Enrico Cucchiani, chief executive officer of Intesa Sanpaolo SpA, told reporters today. Intesa is an investor in Telco SpA, Telecom Italia’s biggest shareholder.
The decision, made during a board meeting in Rome, would allow Telecom Italia to spin off its copper and fiber assets, including street cabinets, into a new company. The assets are valued at about 14 billion euros ($18 billion), a person familiar with the matter has said.
Last month Telecom Italia’s board designated CEO Franco Bernabe to lead a panel to explore the feasibility of a combination with Hutchison’s Italian unit, which would eliminate a competitor offering the cheapest wireless services in the country.
A company spokesman declined to comment on the next board meeting.
Telecom Italia fell as much as 4.9 percent to 60.5 cents and was trading at 60.6 cents at 3 p.m. in Milan. The stock is down 12 percent this year.
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