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Naguib Sawiris Is Said to Make Offer for Telecom Italia Stake

November 11, 2012

Egyptian billionaire Naguib Sawiris, founder of Orascom Telecom Holding SAE (ORTE), offered to purchase a stake in Telecom Italia SpA (TIT), according to a person with direct knowledge of the bid.

The offer is for a minority stake in Italy’s former phone monopoly, said the person, who declined to be identified because the talks are private. Sawiris “declined to comment about rumors circulating in the media,” Orascom Telecom Media & Technology Holding SAE spokeswoman Manal Abdel-Hamid said. Telecom Italia officials didn’t return calls and e-mails.

Telecom Italia’s management board discussed a bid from Sawiris at a meeting on Nov. 8, Corriere della Sera reported Nov. 10. The offer is for as much as 5 billion euros ($6.4 billion), though the amount the businessman plans to invest wasn’t discussed by management, according to the newspaper. Milan-based Telecom Italia has a market value of almost 13 billion euros after falling 17 percent this year.

“Telecom Italia is so distressed something has to happen,” said Robin Bienenstock, an analyst at Sanford C. Bernstein In London. “M&A will drive the share price up and if there is resistance to Sawiris, Telecom Italia may have no choice but to do a deal with Cassa Depositi.”

Telecom Italia is considering a plan to spin off its fixed- line network, and Chief Executive Officer Franco Bernabe (BNBC) has said there is an “open dialogue” with state lender Cassa Depositi e Prestiti SpA about a possible investment in the network. Buying a stake in Italy’s biggest phone company would mark Sawiris’s return into the market a year after he sold mobile operator Wind Telecom SpA.

Shares Fall

Telecom Italia on Nov. 9 reported a 13 percent decline in net income to 681 million euros from a year earlier. The company is suffering as competition and the region’s sovereign debt crisis crimp sales and profit margins.

The shares gained 3.7 percent to 69.1 cents in Milan trading on Nov. 9. The shares traded at a 15-year low of 61 cents on July 24.

Telefonica SA (TEF), Assicurazioni Generali SpA (G), Mediobanca SpA and Intesa Sanpaolo SpA together own about 22 percent of Telecom Italia through holding company Telco SpA.

Sawiris offered “slightly” more than 1 billion euros for Telefonica SA’s stake in Telco, an offer that was rebuffed by the Spanish phone company’s Chief Executive Officer Cesar Alierta, Il Sole 24 Ore reported Oct. 16.

Sawiris last year merged Italy’s Wind with VimpelCom Ltd. (VIP:US) This year, he added gold to his investments after agreeing to buy Canada’s La Mancha Resources Inc. (LMA) The Sawiris family also has interests in construction, fertilizer, cement, real estate and hotel development.

To contact the reporter on this story: Elisa Martinuzzi in Milan at

To contact the editor responsible for this story: Edward Evans at

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