(Adds information from separate newspaper article)
MILAN Feb 5 Italy's biggest highways operator
Atlantia plans to make a paper-only offer for airport
group Gemina to avoid an increase in its debts.
"I don't want to go into the technical details," Chief
Executive Giovanni Castellucci said in an interview with
Corriere della Sera newspaper on Tuesday.
"Our goal is clear: a full merger without spending any cash,
so that we don't increase Atlantia's debt level."
But powerful Gemina shareholders, including investment bank
Mediobanca and insurers Fondiaria and
Generali, want Atlantia's offer to include cash,
according to a report in Il Messaggero also on Tuesday.
They want to monetise their stakes, according to the report
in Il Messaggero.
Atlantia and Gemina, both controlled by the Benetton
family's holding Sintonia, said last month they were in talks to
merge following months of speculation about a possible tie-up.
The deal is worth around 1.1 billion euros ($1.5 billion)
and would help Gemina with a plan to invest in Rome's Fiumicino
Castellucci told Corriere della Sera the merger would enable
Atlantia to enter a new business sector, and would give Gemina
the financial stability for its plan to spend more than 12
billion euros to 2044 in upgrading Rome's airport.
The deal would make Atlantia more like larger rivals such as
Vinci, Ferrovial or Abertis which
have both motorway and airport assets.
Atlantia had debt of 10.0 billion euros as of September 30,
compared to a market capitalisation of 8.7 billion euros
according to Reuters data.
Credit ratings agency Fitch said on January 14 it was
monitoring Atlantia's A rating for potential impact from the
merger with the much smaller and less-indebted Gemina.
"A material increase in the current and projected group's
debt level could potentially have a rating impact," Fitch said.
Gemina's advisers Credit Suisse and Banca Leonardo believe
the company's regulated asset base values it at 1.8 billion
euros, which is equivalent to its market capitalization, Il
Messaggero said. That valuation does not take Gemina's
investment plans into account.
Gemina's lawyers are trying to determine whether Atlantia
will be forced to pay minority shareholders an opt-out option,
Il Messaggero said.
Gemina was not immediately available to comment.
(Reporting by Jennifer Clark; Editing by Mike Nesbit and Jane