Blue chips to fight for Seat Pagine

Three private equity consortia have emerged as potential bidders for the Italian telephone directories business owned by Telecom Italia.

The sale of Seat Pagine Gialle, the Italian telephone directories business owned by Italian telecoms group Telecom Italia, looks set to be a battle between three groups of private equity firms from Europe and the US. Blackstone has been linked with an offer for the directories unit since rumours of a sale emerged earlier in the year.

 

A group of three US heavyweights comprising Kohlberg Kravis Roberts, Texas Pacific Group and Blackstone Group have joined forces to bid for the unit, redoubling their interest in the European market.

 

BC Partners, the European firm currently linked to a bid for Six Continents’ pubs unit in the UK, has formed an alliance with Permira, CVC Capital Partners and Italy's Investitori Associati.

 

According to the Wall Street Journal, the third group comprises Hicks Muse Tate & Furst and Apax Partners, the team that acquired British Telecom’s Yell directories business for £2.14bn in 2001.

 

Seat Pagine Gialle last year reported a healthy increase in its performance. It reported turnover of E1.99bn in 2002, comparable with the 2001 numbers (E1.96bn), although EBIT was up 16 per cent from E200m to E232m.

 

Telecom Italia controls 56 per cent of Pagine Gialle, which is also listed on the Milan bourse. The unit also includes the Tin.it and Vegillio internet units, as well as the La7 TV station. The company is being valued at up to $4.5bn, which would put it at the top of the European buyout chart.

 

Last month, Telecom Italia announced plans to merge with fellow Italian telecoms business Olivetti. The sale of Pagine Gialle will help it reduce the E9bn in debt it is taking on to help finance the planned merger.

 

A final decision on the sale of Pagine Gialle is expected by the end of May.