UPDATE 1-Sawiris bids 5 bln euros for Telecom Italia stake -press

Mon Nov 12, 2012 4:15am EST

By Danilo Masoni

MILAN Nov 12 (Reuters) - Egyptian businessman Naguib Sawiris has offered to invest as much as 5 billion euros ($6.4 billion) for a stake in Telecom Italia, the Wall Street Journal said on Monday, quoting sources close to the Italian company.

At current market values, the offer would buy a stake in the country's largest telecoms operator of about 30 percent - the level beyond which a buyer would be obliged under Italian law to bid for the rest of the shares.

The newspaper said Telecom Italia Chairman Franco Bernabe brought the offer before the board for consideration last week. A report in Corriere della Sera newspaper at the weekend said Sawiris may invest around 4-5 billion euros. It cited no source.

Telecom Italia was not immediately available for comment. A spokesperson for Sawiris declined to comment.

Sawiris, who earlier this year told Reuters he wanted to get back on the acquisition trail and was eyeing business in Europe, the Middle East and Africa, has previously made a foray in Italy's telecommunications market via mobile phone operator Wind. He later sold out to Russia's Vimpelcom.

A big investment in Telecom Italia by the Egyptian entrepreneur would underscore the vulnerability of some of Europe's heavily indebted big companies, hit hard by the euro zone crisis at a time when emerging-markets investors are awash with money.

Telecom Italia, which is facing pressure on sales and margins due to Italy's recession, has a net debt of 29.5 billion euros which it hopes to cut by 2 billion euros at the end of this year.

Telecom is controlled by an unlisted holding company, Telco, which owns 22.4 percent. Telco's shareholders comprise Spain's Telefonica, Assicurazioni Generali, Mediobanca and Intesa Sanpaolo.

SHAREHOLDERS

Analysts said Sawiris's approach could create a stir among Telecom's shareholders, which have had to write down the value of their stakes repeatedly in the past year. The company is also considering selling a stake in its 15-billion-euro fixed-line network to state-owned financial holding company CDP.

"In combination with abysmal numbers, and a company that has no credible plan for turnaround, these approaches must force Telecom Italia stakeholders to review their options, either embrace Mr. Sawiris or push management closer to the arms of a deal with the CDP," said Bernstein analyst Robin Bienenstock.

"Either should create value for Telecom Italia shareholders."

Telecom's shares rose 3.2 percent to 0.71 euros by 0830 GMT, boosted by the reports.

"The interest of a new investor would support the shares that have markedly underperformed the market, and the sector, over the past two months," a Milan trader said.

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