By Danilo Masoni
MILAN Nov 12 Egyptian businessman Naguib
Sawiris has offered to invest as much as 5 billion euros ($6.4
billion) for a stake in Telecom Italia, the Wall
Street Journal said on Monday, quoting sources close to the
At current market values, the offer would buy a stake in the
country's largest telecoms operator of about 30 percent - the
level beyond which a buyer would be obliged under Italian law to
bid for the rest of the shares.
The newspaper said Telecom Italia Chairman Franco Bernabe
brought the offer before the board for consideration last week.
A report in Corriere della Sera newspaper at the weekend said
Sawiris may invest around 4-5 billion euros. It cited no source.
Telecom Italia was not immediately available for comment. A
spokesperson for Sawiris declined to comment.
Sawiris, who earlier this year told Reuters he wanted to get
back on the acquisition trail and was eyeing business 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.
A big investment in Telecom Italia by the Egyptian
entrepreneur would underscore the vulnerability of some of
Europe's heavily indebted big companies, hit hard by the euro
zone crisis at a time when emerging-markets investors are awash
Telecom Italia, which is facing pressure on sales and
margins due to Italy's recession, has a net debt of 29.5 billion
euros which it hopes to cut by 2 billion euros at the end of
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.
Analysts said Sawiris's approach could create a stir among
Telecom's shareholders, which 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
Telecom's shares rose 3.2 percent to 0.71 euros by 0830 GMT,
boosted by the reports.
"The interest of a new investor would support the shares
that have markedly underperformed the market, and the sector,
over the past two months," a Milan trader said.