January 10, 2020 / 4:41 PM / 8 days ago

Atlantia preparing to restart sweetened Telepass auction - sources

MILAN, Jan 9 (Reuters) - Italy’s Benetton-backed Atlantia is preparing to restart an auction process to sell up to 49% of its toll-road payment business Telepass after bids last year valued the entire business at more than 2 billion euros ($2.2 billion), three sources said.

The Italian infrastructure group tapped investors last year to sell around 30% of Telepass. Mediobanca, Goldman Sachs and Banca IMI were in charge of that process which was put on the backburner in October.

Atlantia, controlled by the Benetton family through its Edizione holding, has since worked on a plan to make the business more attractive for investors to maximise its value, one of the sources said.

“The plan will be ready in February and then we should be ready to restart,” the sources said.

Atlantia declined to comment.

Two sources said the company was aiming to sell a stake of up to 49% but one added it could even decide to sell a majority stake depending on the final bidders.

Atlantia is caught up in a heated stand-off with the government over the collapse of a bridge in Genoa in 2018 which killed 43 people and Rome is threatening to strip its Autostrade per l’Italia (ASPI) division of its concessions.

Sources said the Telepass deal could be impacted by fallout from the dispute over ASPI which accounts for around a third of Atlantia’s overall core earnings.

One source said there were doubts whether Atlantia could restart the process as early as February since there are more pressing issues to sort out.

The sale of a potentially larger stake, with a bigger say in governance, could make the deal more interesting for private equity investors.

Last year Warburg Pincus, Partners Group and Apax Partners were among the bidders for a 30% stake along with an Italian consortium including digital payment group SIA and insurer Generali.

A third source familiar with the matter said it was likely Atlantia would opt to sell up to 49% to keep control.

“They could be diluted in a potential future integration with a larger entity,” the source said.

Atlantia bought Spain’s Abertis in 2018 to create the world’s biggest motorway operator and currently sits on a debt pile of around 38 billion euros.

Investors have warmed to payment processing businesses across Europe as consumers switch to digital systems from cash, boosting valuations and returns.

Telepass, which operates in 11 countries in Europe, posted core earnings of more than 110 million euros in 2018. ($1 = 0.8998 euros) (Additional reporting by Elisa Anzolin in Milan and Pamela Barbaglia in London; Editing by Elaine Hardcastle)

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