MILAN (Reuters) - Telefonica (TEF.MC) will not exercise an option to increase to 100 percent its stake in Telco, the holding company that controls Telecom Italia (TLIT.MI), the chairman of the Spanish telecoms group told an Italian newspaper on Thursday.
In his first interview since Telefonica agreed on a deal to gradually take over its Italian rival by buying out co-shareholders in Telco, Cesar Alierta said he expected other Telco shareholders to keep some or all of their stakes until February 2015. That is when a shareholder agreement among investors in Telco expires.
“The structure of the new accords is very clear: Telefonica cannot own more than 49 percent of Telco,” he told business daily Il Sole 24 Ore. “We have no intention of exercising the call (option).”
Alierta ruled out a merger between Telefonica and Telecom Italia.
“There is no need for a merger between Telefonica and Telecom, and this is not under consideration,” he said.
Telefonica reached a deal in September with its Italian partners in Telco - insurer Generali (GASI.MI) and banks Intesa Sanpaolo (ISP.MI) and Mediobanca (MDBI.MI) - allowing it to take over the investment vehicle starting from 2014.
Telco controls Telecom Italia with a 22.4 percent stake and appoints a majority of board members at the phone group.
Following the Telco deal, Telecom Italia named Marco Patuano as new CEO and approved a new business plan. Minority investors accused the board of only looking after the interests of key shareholders.
The 4 billion-euro, three-year plan will cut Telecom Italia’s debt to below 2.2 times core earnings while boosting investments in ultra broadband and 4G mobile networks. Alierta said the plan was “a good start”.
He added it was important for Telecom Italia to develop its business through investment in high-speed networks.
On Thursday, Telecom Italia agreed to sell its entire stake in Telecom Argentina (TEC2.BA) to Fintech Group for $960 million.
Reporting Danilo Masoni and Valentina Za