Telecom Italia SpA pared gains in Milan trading after state lender Cassa Depositi & Prestiti SpA denied a report in Il Sole 24 Ore newspaper on the creation of a fixed-line network venture with Italy’s biggest phone operator.
Telecom Italia was trading up 3.3 percent at 70 cents as of 11:02 a.m. after a jump of as much as 6.4 percent earlier in the day. The stock has declined 16 percent this year, valuing Telecom Italia at 12.8 billion euros ($16.1 billion).
A unit of Cassa Depositi & Prestiti may invest 3 billion euros in the partnership, with Telecom Italia contributing its fixed-line unit, Il Sole 24 Ore said. CDP “isn’t aware” of the proposal, and Chairman Franco Bassanini hasn’t scheduled a “secret meeting” that the newspaper reported was planned with Telecom Italia Chief Operating Officer Marco Patuano, according to an official for the lender who spoke by phone today. Rome-based Telecom Italia called the report “groundless.”
Telecom Italia may transfer the fixed-line network into a company called Opac, or fixed-line wholesale access operator, valuing its grid at about 12 billion euros, Il Sole said. Cassa Depositi and its Fondo Strategico Italiano SpA vehicle may also contribute the Metroweb fiber-optic network to the venture, according to Il Sole.
“If confirmed such a deal would be very positive for Telecom Italia as it would allow it to bring out the value of the network,” said Alessandro Frigerio, a fund manager at RMJ Sgr in Milan.