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Sovereign wealth funds controlled by the United Arab Emirates could consider acquiring a stake in Italian listed telecommunications group Telecom Italia, UAE Economy Minister Sultan Bin Saeed Al Mansouri said.
Speaking to this news service during the 6th EuroMediterraneo conference in Milan, Al Masouri said that UAE funds could consider acquiring a stake in Telecom Italia after careful study, but noted that no talks have been held regarding a stake purchase.
Al Mansouri said this after a closed door meeting between Al Mansouri, Italian Foreign Minister Franco Frattini, Telecom Italia chairman Gabriele Galateri di Genola and Telecom Italia chief executive Franco Bernabe.
Also speaking to this news service, Frattini said that he did not discuss the possible purchase of the Telecom Italia stake by UAE backed funds, but that he discussed the creation of a strategic committee to oversee investment by SWFs.
Both Bernabe and Galateri declined to comment when asked by this news service whether the company would consider selling a stake to a SWF connected entity.
A UAE government source confirmed that there have been confidential contacts between UAE connected funds and a possible purchase of a TI stake, while a source at the Italian Foreign Ministry said that the Italian government would not be opposed to a UAE connected SWF taking a large minority stake in Telecom Italia.
The UAE source said that Telecom Italia could be used as an instrument to achieve regional consolidation in the Gulf, Turkish, Middle Eastern and North African telecommunications market. The source said that a Western European telecommunications, especially one in southern Europe, could have an easier time consolidating regional telecommunications groups than a national player such as Etisalat.
The UAE source also noted that unlike other European telecos such as Deutsche Telekom and France Telecom, Telecom Italia is the only leading telecommunications that remains independent notwithstanding its strategic alliance with Spain’s Telefonica.
A source at Intesa Sanpaolo, one of the shareholders which control a 24.8% stake in Telecom Italia, said the bank would welcome the entry of a UAE connected SWF if the new investor would pay a substantial premium to Telecom Italia’s current share price.
”We (Intesa Sanpaolo) do not want to be shareholders of Telecom Italia forever and we want to go back to what we do, which is being bankers,” the source said.
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