(Adds more details from statement, background)
By Lisa Jucca
MILAN, June 11 Insurer Generali, one
of four key owners of Telecom Italia, decided on
Wednesday to exit ahead of time a seven-year shareholder
agreement to control the Italian phone company, making room for
future new investors.
Generali said in a statement it had exercised the right to
withdraw from the pact its 19.3 percent holding in Telco, an
investment vehicle that is Telecom Italia's biggest investor
with a 22.4 percent stake.
Generali formed the Telco group in 2007 with Spanish telecom
operator Telefonica and Italian banks Intesa Sanpaolo
and Mediobanca to fend off a takeover bid by
AT&T and Mexican tycoon Carlos Slim.
Telco members have since repeatedly written down the value
of their investment as the group struggled to make money in an
increasingly competitive domestic market.
Generali's decision to exit the agreement, originally due to
expire at the end of 2015, kickstarts the unravelling of the
pact as both Mediobanca and Intesa Sanpaolo have signalled their
willingness to leave Telco and sell their Telecom Italia
Generali's move is also coherent with its strategy of
selling non-core assets to rebuild its capital base and focus on
its main insurance business.
"The exit from Telco is in line with (Generali's) strategy,
aimed at actively administrating its assets, and will streamline
the management of the investment itself," said Generali.
Once the Italian partners are gone, Telefonica, which
controls an indirect stake of 15 percent in Telecom Italia, will
be the only industrial investor in the Italy's biggest telecoms
company at a time when the sector is expected to consolidate.
Last year, Telecom Italia attracted interest from Egyptian
tycoon Naguib Sawiris and Hong Kong-based conglomerate Hutchison
Whampoa. But the approaches were rejected by the
Italian company's board.
Telco was until recently able to appoint a majority of board
members. However, under pressure from minority shareholders,
Telecom Italia changed its corporate governance practices this
year and appointed an all-independent board.
Telefonica has a stake of 66 percent in Telco. Intesa and
Mediobanca hold each 7.34 percent of Telco.
Under the terms of the Telco agreement, investors wanting to
leave the pact must notify the others during set time windows.
The first opportunity to do so was June.
Generali said it had asked its Chief Executive Mario Greco
to define the exact procedure to implement the exit from Telco,
a process that could take six months.
Quitting Telco frees its members from obligations regarding
their Telecom Italia stakes, allowing them to sell their shares
on the market or to another investor. Telefonica has the option
to buy the stakes of its Telco partners.
(Reporting by Lisa Jucca; Editing by Pravin Char and David