Generali Confirms Intent to Sell Telecom Italia Stake
Published on: 11th Jun 2014
There are moves to break up the shareholders pact that controls Telecom Italia after one of the shareholders confirmed previous rumours that it will be pulling out.
Telco is the holding company which is controlled by a group of Italian shareholders, and Spain's Telefonica -- and although it owns just 23.6 percent ot Telecom Italia, thanks to a legacy quirk, it nominates the majority of the directors to the company.
That gives it effective control over Telecom Italia for less than a quarter of the shares.
One of the shareholders in Telco though, the Italian insurance firm, Generali has announced that it is withdrawing from the shareholder agreement.
It has an option to demerge its stake from Telco, although the exact procedure for that to take place is not currently decided on.
The shareholders agreement will still bind Generali until the deadline of 28 th February 2015 or, should the demerger be earlier finalized, until the process is completed.
The move is another step in a long attempt to normalise the shareholder structure at Telecom Italia, which should make the company more desirable to other investors, while also removing the overhang from Telefonica's effective control over the management.
Telefonica owns 42.3% of the holding company, which it bought back in 2007 for EUR2.3 billion. The other shareholders are Assicurazioni Generali, Intesa Sanpaolo, Mediobanca and Sintonia.
Removing the Telefonica control also removes pressure on both companies to resolve their Brazilian dispute, where Telefonica effectively controls more than half the market thanks to owning stakes in two mobile networks.