Reuters: Global Markets: Telecom Italia shares fall after Sawiris outlines plans

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Telecom Italia shares fall after Sawiris outlines plans Nov 27th 2012, 14:14 MILAN | Tue Nov 27, 2012 9:14am EST MILAN (Reuters) - Shares in Telecom Italia (TLIT.MI) fell more than 2 percent after Egyptian tycoon Naguib Sawiris outlined a proposal to take a stake in the former telecoms monopoly through a 3-billion-euro ($3.9 billion) capital hike. Sawiris told Reuters he proposed that the capital increase be open to all shareholders, not just himself, and that it should be conducted around the current market price of 0.70 euros per share. That is likely to draw the ire of other Telecom Italia shareholders, including Spain's Telefonica (TEF.MC) and the three Italian financial institutions that together own 22.4 percent via an unlisted holding company, Telco. On Monday, Telecom Italia's third-largest investor said the right price for any deal was 1.5 euros per share, in line with what most shareholders have in their books and more than twice the market share price. Analysts said conditions outlined by the Egyptian investor reduced the likelihood of an agreement. "These declarations make us believe that the Sawiris hypothesis could be ruled out," analysts at Italian brokerage Banca Akros said. "At these conditions, we think, there would be no value creation nor strategic benefits for Telco investors and minority shareholders." At 0827 EDT, Telecom Italia shares were trading at 0.678 euros, down 2.5 percent, underperforming the European telecom sector index .SXKP, which was down 0.6 percent. The proposal from Sawiris will be discussed at a Telecom Italia board meeting on December 6 along with other key strategy issues such as a possible bid for Vivendi's (VIV.PA) GVT unit in Brazil and the possible sale of a stake in the group's Italian fixed-line network. The company's chief operating officer had said a investment from Sawiris was one option to finance a possible bid for GVT. (Reporting By Danilo Masoni; Editing by Helen Massy-Beresford) Link this Share this Digg this Email Reprints

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