UPDATE: Tel Italia Main Investors Renew Pact; Benetton Exits
October 28 2009 - 4:44PM
Dow Jones News
Spain's Telefonica SA (TEF, TEF.MC) and Telecom Italia's (TI,
TIT.MI) main Italian investors apart from the Benetton family
renewed their shareholding pact Wednesday, postponing a crucial
decision over control of Italy's largest telecomunications
operator.
Telco's pact, which controls Telecom Italia with a 24.5% stake,
was confirmed for another three years, with a "withdrawal clause"
that allows the remaining shareholders to exit the pact in April
2011.
The pact keeps control in the hands of Telefonica, which holds a
10% indirect stake in Telecom Italia, together with Italian banks
Intesa Sanpaolo SpA (ISNPY, ISP.MI), Mediobanca SpA (MB.MI) and
insurer Assicurazioni Generali SpA (G.MI).
Benetton's holding company, Sintonia, said Wednesday it will
leave the pact. Sintonia was one of Telco's smaller investors, with
a 8.4% stake.
Analysts widely expected a renewal of Telco's shareholding pact,
while Sintonia's last-minute withdrawal is not seen as having a big
impact on Telecom Italia's controlling structure in the short
term.
The fact that Telco's shareholders have included the possibility
of abandoning the pact after 18 months indicates a final solution
for Telecom Italia's control has yet to be found, analysts
noted.
Telco was created in 2007 to lock in Telecom Italia's control
after Pirelli & C. (PC.MI) sold its key indirect stake in
Italy's largest telecom operator.
The exit of Sintonia comes after the Benetton family openly
voiced disappointment over their telecom investment.
Sintonia posted a EUR46 million loss in 2008 after a EUR117
million write-down of its investment in Telco.
According to people familiar with the situation, Sintonia will
take on its part of Telco's debt after leaving the pact and will
retain its direct stake in Telecom Italia.
Telco shareholders said in a joint statement that they will
evaluate alternative ways for Sintonia to exit, adding that its
departure will be possibly completed by the end of November.
With overlapping operations in growth areas like Latin America,
Telefonica has long been considered a likely merger partner for
Telecom Italia.
But Rome has signalled it will not allow a strategic national
asset like Italy's largest phone operator to fall into foreign
hands.
Last month, Italy's deputy communications minister attacked
Telefonica's stake in Telco as a "significant problem."
Telefonica's strong presence in Telco has also been questioned
by some investors, including the Fossati family, which owns a 5%
stake in Telecom Italia, and the Asati group of small shareholders,
which says the Spanish company is an obstacle to Telecom Italia's
future growth.
-By Giada Zampano, Dow Jones Newswires; +39-06-69766920;
giada.zampano@dowjones.com
(Sabrina Cohen and Jason Sinclair contributed to this
report.)