The Gulf Time Newspaper One of the finest business newspapers in the UAE brought to you by our professional writers and editors.
Bloomberg
Telecom Italia SpA’s undersea-cable business Sparkle is among the assets the phone carrier is evaluating for sale to boost its stock price, according to people familiar with the matter.
The former phone monopoly is contemplating ways to free up cash that it could spend on cutting debt and paying dividends, said the people, who asked not to be identified because the deliberations are private. As part of the retrenchment, the company also is looking to refocus on its home market.
Telecom Italia revealed in an earnings release that the board is considering strategic options for its subsidiaries, without providing details.
The carrier’s subsidiaries — including Sparkle, wireless towers unit Inwit SpA and a Brazilian division — have become a focus for shareholders after US activist investor Elliott Management Corp. took control of the board and suggested asset sales.
Telecom Italia is at the center of a power struggle between Elliott and Vivendi SA, the French media conglomerate controlled by Vincent Bollore, which is the carrier’s largest shareholder.
A Rome-based Telecom Italia spokesman declined to comment on any possible asset sales.
Investor Struggle
Elliott wrested board control from Vivendi after shareholders supported its call to improve governance and push for asset sales and a reinstated dividend. Both sides support Chief Executive Officer Amos Genish, who had come into conflict with the board last month over critical remarks he made to reporters about certain directors.
Genish said in a March interview that the company was trying to sell Sparkle and was in informal talks with potential buyers, with a formal process to follow.
Vivendi is considering calling a special shareholder meeting in a bid to win back control of the carrier’s board, people familiar with the matter said last month.
Telecom Italia posted second-quarter results that were in line with analysts’ estimates. The carrier reported comparable earnings before interest, taxes, depreciation and amortization were 2.03 billion euros ($2.37 billion), matching the average estimate of six analysts’ estimates compiled by Bloomberg. Domestic revenue amounted to 3.8 billion euros.