MILAN, April 6 Hong Kong-based Hutchison Whampoa
could end up with a 10 percent stake in Italy's
Telecom Italia, if talks over a tie-up between
Hutchison's Italian mobile phone business and Telecom Italia are
successful, daily La Repubblica reported.
A separate report by Italian daily Il Sole 24Ore, however,
said any stake would not exceed 20 percent.
Telecom Italia said on Friday it is in contact with the Hong
Kong-based group over a possible integration with Hutchison's 3
Italia, also known as H3G.
"The contacts are in such embryonic and preliminary state
that the company cannot make further comment," Telecom Italia
said, adding the matter would be discussed at a board meeting on
Analysts estimate 3 Italia could be worth between 1.5
billion euros and 2 billion euros. Neither side gave any details
of how a deal might be structured.
The report in La Repubblica on Saturday said that Telecom
Italia might take over 3 Italia and issue new shares to allow
Hutchison Whampoa to become one of its shareholders.
Allowing Hutchison to take a big stake, however, would
unsettle the balance of power in Telecom Italia, which operates
Italy's fixed-line telecoms network. The owners of holding
company Telco currently control more than a fifth of the Italian
telecoms group and may be reluctant to have their stakes
La Repubblica, without citing its sources, said that
advisors were working on evaluations, but the common view was
that the number of new shares that would be given to Hutchison
Whampoa would not be bigger than a 10 percent stake, with a
dilution of Telco's stake to around 20 percent from the current
Telecom Italia could not immediately be reached for comment.
Il Sole 24Ore, quoting unnamed sources, said Telecom Italia
had ruled out allowing Hutchison a stake bigger than 20 percent
and a deal would have to be part in cash and part in shares.
A merger with a cash component would be attractive to
Telco's owners, La Stampa, another daily, said.
Telco is owned by Spanish telecoms operator Telefonica
, the largest investor, insurer Generali and
banks IntesaSanpaolo and Mediobanca.
Spokespersons for the Italian owners of Telco could not be
reached for comment. A spokesman for Telefonica declined to
comment on media reports.
(Reporting by Francesca Landini, additional reporting by Clare
Kane in Madrid; Editing by Susan Fenton)