Telecom Italia Owners Generali, Mediobanca to Sell Stakes

Assicurazioni Generali SpA and Mediobanca SpA will unravel a seven-year partnership that has kept the ownership of Telecom Italia SpA European, potentially opening the door for a new investor in the phone company.

Generali plans to exercise its right next month to exit its 19 percent holding in Telco SpA, the investment vehicle that owns 22.4 percent of Telecom Italia, according to the insurer’s chairman, Gabriele Galateri. Mediobanca, the investment bank with a 7.3 percent stake in Telco, will follow suit, said a person with knowledge of the matter, who asked not to be identified because the matter isn’t public.

An agreement among Telco shareholders last September -- Spain’s Telefonica SA and Intesa Sanpaolo SpA are the other partners -- give them the right to unwind their interests between June 15 and June 30 or February next year, and they hadn’t previously disclosed a precise timing. The investors have written down their stakes multiple times over the years as intensifying competition in phone and Internet services has hurt sales, earnings and Telecom Italia’s stock price.

Telecom Italia, the country’s biggest telecommunications company, declined as much as 1.6 percent in Milan as it remains unclear who would take on the financial investors’ holdings. The stock fell 0.2 percent to 82.5 euro cents at 5:10 p.m., giving the carrier a value of 14.9 billion euros ($20.3 billion).

Sawiris Interest

Unwinding the investors’ holdings would involve a process that takes about six months. Representatives for Madrid-based Telefonica and Milan-based Mediobanca declined to comment. A Telecom Italia official couldn’t immediately be reached for comment.

Intesa Chief Executive Officer Carlo Messina told reporters today it’s “difficult to say” when the lender will dispose of its 7.3 percent stake in Telco. He reiterated that Italy’s second-largest bank wants to sell non-strategic holdings.

Egyptian billionaire Naguib Sawiris said in a January interview that he was ready to invest in Telecom Italia, on condition that Telefonica would exit.

Leading investor Telefonica last September tightened its grip on Telecom Italia, increasing its holding in Telco to 66 percent, with an option to buy out remaining Telco partners.

Since then, Brazil’s antitrust authorities have stepped in because Telefonica and Telecom Italia both own carriers in the country, and together they control more than half of its wireless market. In December, the Cade regulator fined Telefonica and ordered it to reduce its Brazilian holdings or convince Telecom Italia to sell its local unit, Tim Brasil.

A demerger of Telco, set up in 2007 as Telecom Italia sought to fend off a takeover bid by AT&T Inc. and Mexican billionaire Carlos Slim, would mark a new chapter in Telecom Italia’s history. Marco Patuano, chief executive officer since last October, has announced asset sales and scrapped dividends to restore finances at the carrier. The stock has jumped about 28 percent under his leadership.

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