Telefónica close to gaining majority in Telecom Italia holding company

24 September 2013 | Kavit Majithia


Spain-based Telefónica has moved closer to agreeing a deal to acquire a larger stake in Telecom Italia’s controlling shareholder pact.

The development means Telefónica resolves a stand-off with its Italian partners, and it has begun to negotiate with Italian shareholders to renew its pact for the Telco holding company, which holds a 22% stake in Telecom Italia.

According to the Financial Times, Telefónica is intent on retaining its broad shareholding structure, allowing it an element of influence over its Italian rival in Brazil in particular, where the company has a large operation.

Telecom Italia’s shareholders – including Mediobanca, Intesa Sanpaolo and Generali – are willing to sell their stakes in the company, but not at a large loss.

Telefónica reportedly owns half of Telco and the shareholders’ unwillingness to sell their stakes at a discount has so far proved the biggest issue preventing a sale, according to sources.

The latest developments have seen Telefónica enter into talks with the shareholders to create a structured deal for the financial institutions to decrease their stakes, giving Telefónica a 60% share in Telco. An announcement could be made next Tuesday.

Telefónica is opposed to a possible sale of the company to another strategic partner, with AT&T, Hutchison and VimpelCom all reportedly monitoring the situation.