Telecom Italia tie-up with Hutchison put back

Reuters News
Posted: Jun 05, 2013 2:32 PM
Telecom Italia tie-up with Hutchison put back

MILAN (Reuters) - A possible tie-up between Telecom Italia and Hutchison Whampoa was put on the back burner on Wednesday when the board of the Italian telecoms company postponed discussing the merger until a future date.

Italy's biggest phone company has just approved a plan to spin off its strategic fixed line network, a move that could ease political concerns over the asset falling into foreign hands.

In a statement on Wednesday, Telecom Italia said its board had not discussed the possible tie-up with the Hong-Kong-based conglomerate and had decided to refer the matter "to a future meeting".

On May 8, Italy's biggest phone company said it would take up to 30 days to assess whether it could bridge differences over valuations with Hutchison.

Two people familiar with the situation said there was no momentum for the deal with Hutchison.

A third source close to the matter, however, said Telecom Italia's board could discuss the issue in the coming weeks.

Hutchison is targeting a majority stake in Telecom Italia in a deal that would involve merging its local unit 3 Italia into the Italian telecoms giant.

Telecom Italia values its network at 13-15 billion euros and estimates the spin off could take up to 18 months to complete, a source with direct knowledge of the situation has said.

The separation of the network could pave the way to selling a stake in it to Italian stake backed fund Cassa Depositi e Prestiti. Shares in Telecom Italia ended on Wednesday down 0.3 percent at 0.575 euros.

(Reporting By Danilo Masoni; Editing by Elaine Hardcastle)