* CEO says GVT something worth looking at
* Egyptian tycoon Sawiris wants to invest in Tel Italia
* CEO says sees no need for a capital increase
* Morgan Stanley, Intesa, others appointed as spinoff
(Adds adviser information)
By Steve Scherer
ROME, Nov 13 Telecom Italia is looking
at Vivendi's Brazilian telecoms company GVT, along with
other opportunities, its said on Tuesday, one day after a
foreign investor proposed injecting fresh cash into Italy's
largest telecoms operator.
"GVT is a fixed-line operator and in Brazil we already have
the second-biggest mobile operator there, so it is certainly
something to look at, just as we are looking at many other
things," CEO Marco Patuano told reporters in Rome.
Egyptian tycoon Naguib Sawiris, who sold Italy's third-
biggest mobile operator Wind last year, wants to re-enter the
country by investing in the debt-laden incumbent operator via a
Telecom Italia said on Monday that it would consider
Sawiris' proposal and had presented some details to its board,
but neither side disclosed the size and the objectives of the
Press reports in Italy have indicated a figure of up to 4
billion euros ($5 billion) and said the move could help Telecom
Italia fund a purchase of GVT.
Sources have told Reuters that Vivendi is seeking at least 7
billion euros for GVT, and that Telecom Italia is one of four
companies that have obtained documents on the Brazilian telecoms
company. The deadline for preliminary, non-binding bids is
around the end of the year, the people said.
Asked whether the company was considering a capital increase
along the lines of what Sawiris proposed, Patuano replied: "At
the moment, there is no need for one."
He declined to comment further on Sawiris's interest in the
The company has also been evaluating a possible spin-off of
its valuable fixed-line network in Italy, and has been in talks
with the state-backed investment fund Cassa Depositi e Prestiti
(CDP) over the project.
Patuano said the company has appointed Morgan Stanley,
Intesa Sanpaolo, Mediobanca and Barclays as advisers for the
eventual spin-off of its fixed-line network, which he said was
Telecom Italia is controlled by an unlisted holding company,
Telco, which owns 22.4 percent of the shares. Spanish telecom
group Telefonica and Assicurazioni Generali,
Mediobanca and Intesa Sanpaolo of Italy are
all shareholders of Telco.
The Italian comeback of Sawiris was met with cold reception
by some of the shareholders on Telecom Italia's board, a source
told Reuters on Monday.
By entailing a capital increase, Sawiris's offer could prove
unappealing to some existing investors as they could see their
stakes in Telecom Italia diluted.
A stronger presence of Telecom Italia in South America via a
GVT acquisition could also clash with Telefonica's presence in
the continent. The two compete in mobile operations in Brazil.
Analysts at Espirito Santo said the limited information on
Sawiris' proposed capital increase meant it was hard to predict
how Telecom Italia's main shareholders would react.
"At this stage there are more questions than answers, such
as the size of the stake Mr. Sawiris is aiming for, the amount
involved and the destination of any proceeds, and this is not to
mention any implications for the controlling vehicle Telco,"
they wrote on Tuesday.
"It remains to be seen if such an operation would be
reserved for Mr. Sawiris, resulting in the dilution of the
remaining shareholders, or if the capital increase would involve
all of TI's shareholders, namely Telco and its own
Telefonica has declined to comment on Sawiris' interest in
Telecom Italia, as have the Italian banks.
At 1622 GMT, shares in Telecom Italia were down 0.28 percent
at 0.72 euros, underperforming a 1.4 percent gain in Milan's
blue chip index.
($1 = 0.7867 euros)
(Writing by Danilo Masoni, additional reporting by Leila Abboud
in Paris; Editing by Jennifer Clark, Louise Heavens and Bernard