Telecom Italia SpA’s board authorized executives of Italy’s biggest phone company to negotiate with state-lender Cassa Depositi e Prestiti SpA for an investment in its fixed-line network.
The company’s management will have the “powers to further investigate the conditions for the possible participation of Cassa Depositi e Prestiti in the capital of a company to be created to manage the access network,” Milan-based Telecom Italia said in a statement today.
Telecom Italia’s board rejected an offer by Egyptian financier Naguib Sawiris, who had approached the company about an investment, the company said. It didn’t elaborate on the reasons for the rejection.
Telecom Italia Chief Executive Offer Franco Bernabe said in September the company would seek to decide by the end of this year whether to spin off its fixed-line access grid. He said at the time that there was an “open dialogue” with Rome-based Cassa Depositi for a possible investment in the network.
A separation would be an unprecedented move for a former government-owned phone company in Europe as companies across the region are facing overwhelming debt, strict oversight and declining domestic revenue.
Telecom Italia’s board last month received a letter from Sawiris expressing interest in acquiring new shares in Telecom Italia. Sawiris offered to invest more than 2 billion euros ($2.6 billion) in Telecom Italia, a person familiar with the matter said last month.
A sale of new shares would have diluted the stakes held by Madrid-based Telefonica, Assicurazioni Generali SpA, Mediobanca SpA and Intesa Sanpaolo SpA, which together own about 22 percent of Telecom Italia through holding company Telco SpA.
Telecom Italia’s board today also asked the management to negotiate better conditions for the sale of its television unit Telecom Italia Media SpA. The company said it received two bids for its TV business, without giving additional details.
Private-equity fund Clessidra SGR SpA and its partner Equinox, and Cairo Communication SpA presented bids for Telecom Italia Media, daily Il Messaggero reported today.
The stock fell 1.7 percent to 70.65 cents in Milan today. The company has dropped 15 percent this year, cutting its market value to 13.2 billion euros.