Trujillo Is Said to Seek $9.6 Billion for Telecom Italia Bid
2014-09-25 09:39:38.104 GMT
By Daniele Lepido and Jeffrey McCracken
Sept. 25 (Bloomberg) -- Former Telstra Corp. Chief
Executive Officer Sol Trujillo is seeking to raise as much as
7.5 billion euros ($9.6 billion) to bid for a stake in Telecom
Italia SpA, according to people familiar with the matter.
Trujillo has discussed the plan with New York-based
financial advisers, and sovereign-wealth funds in Qatar and Abu
Dhabi are among investors that have expressed interest, said the
people, asking not to be named because the proposal is private.
Trujillo hasn’t approached Telecom Italia’s board or executives
because the plan isn’t fully funded and he wants to secure
support from Italy’s government before making a move, they said.
The proposal would foresee 62-year-old Trujillo, who
previously led US West Communications, France’s Orange SA and
Telstra of Australia, taking over as chief executive officer and
bringing in managers to Milan-based Telecom Italia, according to
confidential documents seen by Bloomberg News detailing the
project, dubbed “Adriano.”
An investment of $9.6 billion would be equivalent to almost
half of Telecom Italia’s market value. Telecom Italia had net
debt of $35 billion as of June 30. While financial details of
the plan are still being worked on, Trujillo’s investment could
take the form of a proposed capital increase or buying Telecom
Italia shares on the market, the people said.
Project ‘Adriano’
Trujillo views the proposed investment as a way to benefit
from a Telecom Italia turnaround over time, rather than a short-
term financial gain, the people said.
Telefonica SA and three Italian financial investors --
Mediobanca SA, Intesa Sanpaolo SpA and Assicurazioni Generali
SpA -- are currently winding down the holding company that owns
22.4 percent of Telecom Italia.
Trujillo declined to comment when reached by Bloomberg
News. Representatives of sovereign-wealth funds in Abu Dhabi and
Qatar declined to comment or didn’t immediately respond to
requests for comment.
A spokesman for Telecom Italia declined to comment.
Senior Italian officials are aware of Project “Adriano”
and the government is open to the idea of a foreign investor in
Telecom Italia, the people said. A government representative
couldn’t immediately be reached for comment.
While Italy’s government doesn’t own a stake in Telecom
Italia, state support is seen as crucial because it could veto
deals involving industries it considers to be of national
interest.
GVT Bid
Acquiring a stake in Italy’s largest phone company would
follow the company’s failed bid for Brazilian broadband provider
GVT. Under Trujillo’s plan, which calls for expanding an ultra-
high-speed fiber network in Italy, Telecom Italia’s revenue
would reach 26 billion euros by 2018, with earnings before
interest, taxes, depreciation and amortization rising to about
11 billion euros and net debt falling to less than 16 billion
euros, according to the documents.
Trujillo’s attempt to return to telecommunications wouldn’t
be his first after running phone companies on three continents.
In 2012, he engineered a takeover bid for U.S. mobile carrier T-
Mobile USA, but failed to garner enough interest from private-
equity firms, people familiar with the matter said at the time.
Trujillo got his start at AT&T Corp., then known as Ma
Bell, before its 1984 breakup. He eventually became CEO of US
West, one of the seven Bell operating companies, and later ran
French mobile-phone operator Orange for a year.
After Orange’s takeover by France Telecom SA, Trujillo in
2005 became the CEO of Melbourne-based Telstra, from which he
resigned in 2009 after a tenure marked by clashes with the
Australian government over telecommunications regulation.
Representatives of Trujillo’s group and Italian government
officials have held confidential meetings since May over Project
“Adriano,” the name of a Roman emperor, said one of the
people.
--With assistance from Robert Tuttle in Doha, Ville Heiskanen in
Helsinki and Matthew Martin in Dubai.
To contact the reporters on this story:
Daniele Lepido in Milan at +39-02-8064-4266 or
dlepido1@bloomberg.net;
Jeffrey McCracken in New York at +1-212-617-8517 or
jmccracken3@bloomberg.net
To contact the editors responsible for this story:
Kenneth Wong at +49-30-70010-6215 or
kwong11@bloomberg.net
Kenneth Wong, Jacqueline Simmons
2014-09-25 09:39:38.104 GMT
By Daniele Lepido and Jeffrey McCracken
Sept. 25 (Bloomberg) -- Former Telstra Corp. Chief
Executive Officer Sol Trujillo is seeking to raise as much as
7.5 billion euros ($9.6 billion) to bid for a stake in Telecom
Italia SpA, according to people familiar with the matter.
Trujillo has discussed the plan with New York-based
financial advisers, and sovereign-wealth funds in Qatar and Abu
Dhabi are among investors that have expressed interest, said the
people, asking not to be named because the proposal is private.
Trujillo hasn’t approached Telecom Italia’s board or executives
because the plan isn’t fully funded and he wants to secure
support from Italy’s government before making a move, they said.
The proposal would foresee 62-year-old Trujillo, who
previously led US West Communications, France’s Orange SA and
Telstra of Australia, taking over as chief executive officer and
bringing in managers to Milan-based Telecom Italia, according to
confidential documents seen by Bloomberg News detailing the
project, dubbed “Adriano.”
An investment of $9.6 billion would be equivalent to almost
half of Telecom Italia’s market value. Telecom Italia had net
debt of $35 billion as of June 30. While financial details of
the plan are still being worked on, Trujillo’s investment could
take the form of a proposed capital increase or buying Telecom
Italia shares on the market, the people said.
Project ‘Adriano’
Trujillo views the proposed investment as a way to benefit
from a Telecom Italia turnaround over time, rather than a short-
term financial gain, the people said.
Telefonica SA and three Italian financial investors --
Mediobanca SA, Intesa Sanpaolo SpA and Assicurazioni Generali
SpA -- are currently winding down the holding company that owns
22.4 percent of Telecom Italia.
Trujillo declined to comment when reached by Bloomberg
News. Representatives of sovereign-wealth funds in Abu Dhabi and
Qatar declined to comment or didn’t immediately respond to
requests for comment.
A spokesman for Telecom Italia declined to comment.
Senior Italian officials are aware of Project “Adriano”
and the government is open to the idea of a foreign investor in
Telecom Italia, the people said. A government representative
couldn’t immediately be reached for comment.
While Italy’s government doesn’t own a stake in Telecom
Italia, state support is seen as crucial because it could veto
deals involving industries it considers to be of national
interest.
GVT Bid
Acquiring a stake in Italy’s largest phone company would
follow the company’s failed bid for Brazilian broadband provider
GVT. Under Trujillo’s plan, which calls for expanding an ultra-
high-speed fiber network in Italy, Telecom Italia’s revenue
would reach 26 billion euros by 2018, with earnings before
interest, taxes, depreciation and amortization rising to about
11 billion euros and net debt falling to less than 16 billion
euros, according to the documents.
Trujillo’s attempt to return to telecommunications wouldn’t
be his first after running phone companies on three continents.
In 2012, he engineered a takeover bid for U.S. mobile carrier T-
Mobile USA, but failed to garner enough interest from private-
equity firms, people familiar with the matter said at the time.
Trujillo got his start at AT&T Corp., then known as Ma
Bell, before its 1984 breakup. He eventually became CEO of US
West, one of the seven Bell operating companies, and later ran
French mobile-phone operator Orange for a year.
After Orange’s takeover by France Telecom SA, Trujillo in
2005 became the CEO of Melbourne-based Telstra, from which he
resigned in 2009 after a tenure marked by clashes with the
Australian government over telecommunications regulation.
Representatives of Trujillo’s group and Italian government
officials have held confidential meetings since May over Project
“Adriano,” the name of a Roman emperor, said one of the
people.
--With assistance from Robert Tuttle in Doha, Ville Heiskanen in
Helsinki and Matthew Martin in Dubai.
To contact the reporters on this story:
Daniele Lepido in Milan at +39-02-8064-4266 or
dlepido1@bloomberg.net;
Jeffrey McCracken in New York at +1-212-617-8517 or
jmccracken3@bloomberg.net
To contact the editors responsible for this story:
Kenneth Wong at +49-30-70010-6215 or
kwong11@bloomberg.net
Kenneth Wong, Jacqueline Simmons