Telecom Italia Said to Work With Deutsche Bank on Tower Sale

  • Company's 60% stake in Inwit has market value of $1.8 billion
  • Board said to discuss bid for stake in Metroweb next week

Telecom Italia SpA hired Deutsche Bank AG to sell its 1.6 billion euros ($1.8 billion) stake in Inwit SpA, the mobile-phone tower division that had an initial public offering this year, according to people familiar with the matter.

Italy’s largest phone carrier is working with the investment bank to accelerate the sale process, said two of the people, asking not to be identified because the information is confidential. Inwit shares have jumped more than 20 percent since their June debut in Milan, and Telecom Italia has retained a 60 percent stake. Last month, Telecom Italia’s board asked Chief Executive Officer Marco Patuano to explore a disposal of the holding.

Italian infrastructure fund F2i SGR SpA is a potential bidder, another person familiar with the matter said, asking not to be identified discussing an internal plan. Cellnex Telecom SAU, the Spanish tower operator spun off by Abertis Infraestructuras SA in May, is another interested party, with one scenario recently discussed being a purchase of half of Telecom Italia’s stake, people familiar with the matter said last month.

Inwit shares rose 1.1 percent to 4.44 euros at 10:07 a.m. in Milan. Telecom Italia shares gained 2 percent to 1.10 euros.

Representatives for Deutsche Bank, Telecom Italia and F2i declined to comment.

Inwit owns 11,500 sites, or about 27 percent of all Italian towers, according to the company. The company posted 2014 pro-forma revenue of 314 million euros. Telecom Italia has a market value of 20 billion euros, which is outstripped by its almost 27 billion euros of net debt at the end of June.

Metroweb Bid?

Proceeds from a sale could help Telecom Italia reduce debt and finance a possible bid for Metroweb SpA. Telecom Italia directors plan to meet next week to discuss a cash offer for an initial stake of 40 percent in the fiber-optic carrier, people familiar with the matter said. In a second step, Telecom Italia may boost its holding to 60 percent and then eventually reach 100 percent over as many as five years, they said. No decision has been made and Telecom Italia may decide not to proceed with a bid.

F2i owns 54 percent of Metroweb Italia, which in turn controls 87 percent of Metroweb SpA. The 54 percent stake was valued at about 300 million euros, people familiar said a year ago, when Patuano received a mandate from the board to explore the acquisition. The negotiations later stalled.

Telecom Italia Chairman Giuseppe Recchi, speaking to reporters at a conference in Capri, Italy, on Thursday, confirmed the company is reviewing options for Metroweb and that directors will meet Oct. 16. A representative for Metroweb declined to comment.

Metroweb, which operates a network in the Milan area, would help Telecom Italia improve its urban coverage. Intensifying competition has caused Telecom Italia’s domestic revenue to decline eight consecutive years, to 15.3 billion euros in 2014, compared with 25.8 billion euros in 2006, according to data compiled by Bloomberg.

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