Telefonica to Clinch Telecom Italia Stake Buy in Coming Days

MADRID -(Dow Jones)- Telefonica expects to clinch the acquisition of a controlling stake in Telecom Italia, after the Brazilian telecommunications regulator gave the green light to the takeover.

In a filing to the Spanish market regulator Wednesday, Telefonica said it would pay EUR2.3 billion for 42.3% of the holding company, Telco. This will give Telco 23.6% of the share capital with voting rights in Telecom Italia.

Besides Telefonica, the Telco consortium is made up of a group of financial heavyweights that agreed last April to buy the controlling stake in Telecom Italia.

Telefonica added Telco would conduct a EUR900-million capital hike to finance part of the stake purchase.
Late Tuesday, Brazil's regulator imposed conditions to the approval of the deal to assure that Telefonica and Telecom Italia's Brazilian cellphone operations remain completely separate.

Telefonica part owns local cellphone market-leader Vivo Participacoes, while Telecom Italia controls TIM Participacoes, Brazil's No. 2 cellphone operator.

-By Jason Sinclair, Dow Jones Newswires, 34 913958127, jason.sinclair@dowjones.com

(END) Dow Jones Newswires ­

Posted to the site on 24th October 2007