Telecom Lead Asia: Hong Kong’s Hutchison Whampoa is in talks to buy up to 29.9 percent of Telecom Italia.
Hutchison is looking at buying out three Italian investors in Telco, which controls Telecom Italia through a 22.4 percent stake.
Under the plan outlined in a memorandum of understanding presented to Chairman Franco Bernabe, Hutchison would transfer its local mobile business 3 Italia, which analysts value at 1.5-2 billion euros, to Telecom Italia in exchange for shares.
This would cut the number of Italy’s mobile phone operators from four to three, possibly leading to antitrust conditions since the new group would control 46 percent of this market, Reuters reported.
In addition, Hutchison is offering to buy the combined 12.1 percent owned through Telco by insurer Generali and banks Mediobanca and Intesa Sanpaolo, at a price that could be close to a book value of 1.2 euros a share.
After posting a 2012 net loss of 1.6 billion euros due to goodwill writedowns, it was forced to cut its dividend and turn to costly hybrid securities to fund upgrades of its ageing domestic network and cut debt of more than 28 billion euros.
Hutchison may also buy shares held by other investors. It is unclear whether Spain’s Telefonica wants to sell its effective 10.3 percent stake.
Telefonica paid 2 billion euros for its stake in Telecom Italia in 2007 in a move aimed at fending off an attempt by Mexican rival Carlos Slim, head of America Movil, to buy the former Italian telecoms monopoly.
