Telecom Italia may launch capital increase reserved for CdP to take 50% stake in Open Fiber - report (translated)
26 MAY 2019
Telecom Italia (TIM) [BIT:TIT] could launch a capital increase reserved for state financial holding Cassa Depositi e Prestiti (CdP) in exchange for CdP's 50% stake in Open Fiber, Italian language daily Il Messaggero reported. The unsourced report said that this is one of the scenarios being discussed between CdP and Vivendi [EPA:VIV], the French media group that is TIM's largest shareholder.
The item said that in a second stage, TIM would sell off its telephone network, which would then be merged with Open Fiber. The report added that Enel [BIT:ENEL], which presently holds 50% of Open Fiber, would remain in the company as a minority shareholder with the view of either reaching a governance agreement or exiting entirely at a later stage.
The report noted that at the end of the operation, CdP would receive a 15% stake in TIM based on a 50% stake in Open Fiber being valued at EUR 1bn. This would give CdP a 20%-25% holding in TIM. The item noted that Vivendi's stake would fall from 23.9% to around 20% while activist fund Elliott Management would have a stake of 8%.
The report said that CdP is being advised by Unicredit and JPMorgan on the matter, while Enel is being advised by Mediobanca.
The article noted that the capital increase for CdP would need the prior approval of TIM shareholders.
The report also said that unlike previous similar schemes the newco would operate on an open access principle, allowing other operators access to the infrastructure.