Telecom Italia is considering whether to float its fixed-line network in a move seemingly aimed at keeping it separate from a possible deal with Hutchison Whampoa, according to a report from Italy’s Il Messaggero newspaper.
The former state-owned monopoly is looking into a tie-up with Hutchison Whampoa (Hong Kong) under which it would absorb 3 Italia (Rome, Italy), the Hong Kong-based company’s Italian telecoms business, in return for giving Hutchison Whampoa a 29.9% share in Telecom Italia (Rome, Italy).
According to Reuters, however, the Italian operator has also asked executives to investigate the feasibility of spinning off its fixed-line assets.
Without citing sources, Il Messaggero claims that Cassa Depositi e Prestiti (CDP), an investment fund backed by the Italian state, would own a stake in the fixed-line business as part of the plan for a stock-market flotation.
The arrangement would help Telecom Italia to overcome political opposition to a deal with Hutchison Whampoa.
The operator’s fixed-line business is seen to be of strategic national importance, stoking concern about foreign ownership of the asset.
According to Reuters, Telecom Italia has been in discussions with CDP for several months about hiving off its fixed-line business, but has been unable to agree any terms with the investment fund because of disagreements over valuation.
The news organization says that various estimates put the value of the network at between $15.6 billion and $19.5 billion, with sources claiming that a listing would meet strong investor demand.
Telecom Italia is expected to have reached a decision on whether to pursue talks with Hutchison Whampoa by May 8, the date of its next board meeting.