The Hinduja Group has made it clear that it will seek management control in Telecom Italia if it bids for Italian tyre and real estate major Pirelli’s stake in Italy’s largest telecommunications operator. Though Pirelli holds the largest block of shares in Telecom Italia, acquisition of that stake alone will not give the Hindujas majority control. However, given the widely-held structure of Telecom Italia’s shareholding, it may give them management control. Pirelli owns 80% of Telecom Italia’s holding company Olimpia, which has an 18% stake in Telecom Italia. Telecom Italia is Europe’s fifth largest telecommunications group with sales of nearly $30 bn and market capitalization of $77 bn. Back-of-the-envelope calculations put the acquisition cost for Pirelli’s stake in Olimpia at $12 bn. The race for Telecom Italia is hotting up with Sistema, the Russian billionaire industrialist Vladimir Yevtushenkov being the third to join the fray. US private equity firm Blackstone also expressed an interest in picking up a stake in Telecom Italia two months ago, and several others are expected to join the bidding bandwagon soon.
Read The Economic Times article.
Related Post: The Hinduja Group interested in majority stake in Telecom Italia
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