UPDATE 2-Telecom Italia shares fall after Sawiris outlines plans

Tue Nov 27, 2012 12:25pm EST

* Sawiris offer has no benefits for core investors - analyst

* Telecom Italia to discuss proposal, strategy Dec. 6

* Shares close down 3.2 percent, underperform sector (Adds comment from company Chairman, closing share price)

MILAN, Nov 27 (Reuters) - Shares in Telecom Italia fell more than 3 percent after Egyptian tycoon Naguib Sawiris outlined a proposal to take a stake in the former telecoms monopoly through a 3-billion-euro ($3.9 billion) capital hike.

Sawiris told Reuters he proposed that the capital increase be open to all shareholders, not just himself, and that it should be conducted around the current market price of 0.70 euros per share.

That is likely to draw the ire of other Telecom Italia shareholders, including Spain's Telefonica and the three Italian financial institutions that together own 22.4 percent via an unlisted holding company, Telco.

The company's chief operating officer had said a investment from Sawiris was one option to finance a possible bid for GVT.

On Monday, Telecom Italia's third-largest investor said the right price for any deal was 1.5 euros per share, in line with what most shareholders have in their books and more than twice the market share price.

Analysts said conditions outlined by the Egyptian investor reduced the likelihood of an agreement.

"These declarations make us believe that the Sawiris hypothesis could be ruled out," analysts at Italian brokerage Banca Akros said. "At these conditions, we think, there would be no value creation nor strategic benefits for Telco investors and minority shareholders."

Telecom Italia shares closed at 0.673 euros, down 3.2 percent, underperforming the European telecom sector index , which finished down 2.1 percent.

The proposal from Sawiris will be discussed at a Telecom Italia board meeting on Dec. 6 along with other key strategy issues such as a possible bid for Vivendi's GVT unit in Brazil and the possible sale of a stake in the group's Italian fixed-line network.

"We will make a decision (on Dec. 6), there will be a broad debate and one that I believe will be quite conclusive," said Telecom Italia Chairman Franco Bernabe. "Nothing has been stalled." ($1 = 0.7713 euros) (Reporting By Danilo Masoni; Editing by Helen Massy-Beresford)