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PE groups stalk Telecom Italia mobile arm

Buyout firms Permira, The Carlyle Group and Apax Partners are reportedly mulling separate bids for TIM, the mobile unit of Telecom Italia, in what would be Europe’s biggest ever buyout.

TIM, the mobile arm of Telecom Italia, has attracted the interest of buyout firms The Carlyle Group, Permira and Apax Partners following news that the board of the Italian telecommunications business will meet today to discuss an overhaul of the entire group. With a possible market capitalisation of €46 billion ($58.5 billion), the deal would be Europe’s largest to date.
 
According to Dow Jones, Telecom Italia has confirmed that the board will meet today to discuss a potential reorganisation of the group into new businesses, but said that it would not consider asset sales at this point.
 
However, Borsa Italiana has suspended Telecom Italia’s shares pending a statement from the group.
 
Telecom Italia acquired the 44 percent of TIM it did not own in 2005. At the time, the business was reported to have a market capitalisation of approximately €46 billion before its merger with Telecom Italia. Troncheti Provera, chairman of Telecom Italia, is understood to be planning to reinvent the group as a broadband and content provider rather than a traditional telecoms business.
 
The group has seen its share price drop dramatically in the past year. In early January, Telecom Italia’s shares were trading at approximately €2.65, before falling to €2 at the end of July. News of a possible agreement with Ruper Murdoch’s News Corp over a content deal has seen the shares rise slightly to close on Friday at €2.26.

De Benedetti, former TIM chief executive, current Carlyle manaing director, Italy

In November 2005, Carlyle appointed Marco de Benedetti, previously chief executive of Telecom Italia Mobile, as managing director and head of its Italian buyout team in Milan.
 
Earlier this year, Permira and Apax Partners were part of a consortium that acquired listed Danish telecoms operator TDC in a deal valuing the business at €13 billion. In April, The Blackstone Group paid approximately €2.68 billion to acquire a 4.5 percent stake in Deutsche Telekom.
 
However, Carlyle, Permira and Blackstone were defeated in their bid to acquire Amena, with the mobile unit of Spain’s Auna going to France Telecom in July 2005. Private equity firms again lost out to trade buyers in the race to acquire Italian group Wind SpA, which was eventually acquired by Egyptian entrepreneur Naguib Sawiris for €12.1 billion.