Telecom Italia Owner Generali Says Plans to Sell Its Stake in June

By | May 23, 2014

Assicurazioni Generali SpA, the insurer that is part of the investor group that owns 22.4 percent of Telecom Italia SpA, plans to sell its holding in June, Chairman Gabriele Galateri said.

Galateri spoke today at an event in Milan. In March, the company said it had two windows for possible exit, one in June 2014 and one in February 2015.

Generali owns about 19 percent of Telco SpA, the investor group that controls the board of Milan-based Telecom Italia, suggesting its holding in Italy’s largest phone company is about 4.3 percent. Telecom Italia has a market value of about 14.8 billion euros ($20.2 billion).

The insurer is likely to sell the stake on the market or directly to another investor, Carlo Alberto Carnevale Maffe, a professor of business strategy at Milan’s Bocconi University, said in March. Telco’s other shareholders are Spanish phone company Telefonica SA, and Italy’s Intesa Sanpaolo SpA and Mediobanca SpA.

Telefonica, the largest shareholder in Telco, could face regulatory hurdles if it bought Generali’s stake. Brazil’s antitrust authorities fined Telefonica in December and ordered it to reduce its Brazilian holdings or convince Telecom Italia to sell its local unit. Telefonica and Telecom Italia both own phone carriers in Brazil, and together control more than half of its wireless market.

A Telefonica representative declined to comment.

Intesa and Mediobanca have said that their stakes aren’t strategic and that they are among assets available for sale.

Telecom Italia shares fell 0.8 percent to 82 cents at 9:53 a.m. in Milan. They have gained 15 percent this year.

An exit by any of the Telco partners would unravel a 2007 shareholder pact that put Italy’s biggest phone company under the control of Telefonica and the Italian financial investors. They have written down their stakes in Telecom Italia multiple times over the years as intensifying competition has hurt sales, earnings and the phone company’s stock price.

–With assistance from Rodrigo Orihuela in Rio de Janeiro and Sonia Sirletti in Milan.

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