Telecom Italia Tries to Sell Sparkle Stake

ROME (Reuters) – Telecom Italia (TLIT.MI) has hired banks to seek buyers for a 49 percent stake in its Sparkle business and could also sell some of the unit’s assets, the Italian telecom company said on Tuesday.

The statement came after business daily Il Sole 24 Ore reported that the company had hired Mediobanca and Banca IMI to sell the unit, which could fetch over 1.2 billion euros ($1.64 billion) though its book value stands at 700 million euros. Private equity firms Clessidra, Carlyle and F2i are among those eyeing the sale of Sparkle, which operates fibre-optic networks in Europe and elsewhere, the newspaper said.

Shares of Telecom Italia rose 4.8 percent in afternoon trade, breaking above the 1 euro level.

Telecom Italia in the past has said Sparkle could be sold as part of the company’s plans to cut debt through asset sales, which could raise as much as 3 billion euros.

The company said it could sell Sparkle’s Lan Nautilus Latin American and other minor assets should the opportunity arise.

Separately, a board member of Mediobanca — a key investor in Telecom Italia — said the Italian investment bank did not discuss a potential merger of the telecoms operator with Spain’s Telefonica (TEF.MC) at its board meeting on Tuesday.

An Italian newspaper reported on Saturday that Telecom Italia management had discussed such a deal with Mediobanca and another shareholder, Intesa Sanpaolo SpA (ISP.MI). Telecom Italia has denied the report.

“Absolutely not,” Tarak Ben Ammar, who is on the board of both Mediobanca and Telecom Italia, told reporters when asked if Mediobanca’s board discussed the subject, adding that “it was often the job of newspapers to also invent things”. ($1=.7336 Euro)

(Editing by Simon Jessop)