* Telecom says Sawiris interested in buying newly issued
* Press reports say Sawiris could invest up to 5 billion
* Shares rise more than 6 pct to three-week high
By Danilo Masoni
MILAN, Nov 12 Egyptian businessman Naguib
Sawiris has offered to buy a stake in Telecom Italia,
Italy's largest telecoms company said on Monday after press
reports that Sawiris could invest up to 5 billion euros ($6.4
Telecom Italia said a document from Sawiris had been read
out at a board meeting on Nov. 8, adding that any evaluation on
the offer would be made only once Telecom's management verified
it. The reported sum might buy over a quarter of the company.
Telecom Chairman Franco Bernabe told reporters in Turin that
Sawiris's interest showed "there is important value in the
company". He added: "We are pleased about this."
Telecom Italia did not say how much Sawiris was prepared to
invest, but said the offer would concern new shares, meaning the
Egyptian tycoon would buy into a capital increase.
Both the Wall Street Journal and Italy's Corriere della Sera
newspaper said Sawiris was prepared to invest up to 5 billion
euros in Telecom Italia.
At current market values, that would buy a stake in Telecom
Italia of about 30 percent - the level beyond which a buyer
would be obliged under Italian law to bid for the rest of the
shares. Telecom Italia declined to comment on the value of the
offer. In Cairo, Sawiris also declined to comment.
A big investment in heavily indebted Telecom Italia by the
Egyptian entrepreneur would underscore the vulnerability of some
of southern Europe's big companies, hit hard by the euro zone
crisis at a time when emerging-markets investors are awash with
Sawiris, who earlier this year told Reuters he wanted to get
back on the acquisition trail and was eyeing businesses in
Europe, the Middle East and Africa, has previously made a foray
in Italy's telecommunications market via mobile phone operator
Wind. He later sold out to Russia's Vimpelcom.
Telecom Italia, which is facing pressure on sales and
margins due to Italy's recession, is burdened with a net debt of
29.5 billion euros which it hopes to cut by 2 billion euros at
the end of this year.
Its shares have fallen 18 percent in the past six months. At
1045, the stock was up 6.3 percent at 0.735 euros, after having
hit its highest level in three weeks.
Telecom is controlled by an unlisted holding company, Telco,
which owns 22.4 percent. Telco's shareholders comprise Spain's
Telefonica, Assicurazioni Generali,
Mediobanca and Intesa Sanpaolo.
A capital increase would dilute the current shareholders
while injecting much-needed fresh cash in Telecom Italia to be
used for investments and cutting debt.
Telecom's board "reacted coldly" when it was informed about
Sawiris's offer, a source close the matter told Reuters.
However, an industry source familiar with the situation said
the offer could be met with favour by Bernabe, who is keen to
have a freer hand in running the company.
Telecom's shareholders have had to write down the value of
their stakes repeatedly in the past year. The company is also
considering selling a stake in its 15-billion-euro fixed-line
network to state-owned financial holding company CDP.
"In combination with abysmal numbers, and a company that has
no credible plan for turnaround, these approaches must force
Telecom Italia stakeholders to review their options, either
embrace Mr. Sawiris or push management closer to the arms
of a deal with the CDP," said Bernstein analyst Robin
"Either should create value for Telecom Italia