AT&T and America Movil have made a joint bid to each buy a one third share in Olimpia, a holding company with the only asset of an 18 percent stake in Telecom Italia (AT&T has an 8 percent stake of America Movil). The negotiations are with Pirelli, which owns an 80 percent stake in Olimpia. “The offer values the underlying shares in Telecom Italia, Italy’s largest phone company, at 2.82-euros each (US$3.77), minus Olimpia’s undisclosed net debt, Milan-based Pirelli said in a statement distributed by the Italian Exchange today. Based on the market value of Telecom Italia, also based in Milan, each one-third stake is worth about $3.2 billion,” estimated Bloomberg. Pirelli is looking for a buyer after other shareholders in Olimpia exercised their rights to force Pirelli to buy them out, and Pirelli recorded a 2.1-billion-euro writedown related to its investment in the phone company. Telecom Italia also runs Brazilian operator TIM, a definite drawcard.
Seeking Alpha quotes the WSJ about political concerns over the possible sale: “Despite the 32% premium over Friday’s close, it will still result in a €3.6b loss for Pirelli, according to The Wall Street Journal. Pirelli said there will be exclusive negotiations with both parties until April 30, although two Italian banks have right of first refusal. Italy’s Communications Minister said he was “extremely worried” about the possible sale to foreign companies and the Journal says he encouraged Italian banks and investors to counterbid.”
(AT&T press release)
America Movil also announced last friday that it has bought 100 percent of Telecomunicaciones de Puerto Rico from Verizon, a bank, some employees and the Puerto Rican government. (Reuters)