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Hutchison Whampoa wants to raise a higher-than-expected €2.5bn ($3bn) from the Milan listing of its Italian third-generation mobile business in a move that will test investors’ belief in the earnings growth potential of 3G.

People close to the situation said the Hong Kong conglomerate controlled by Li Ka-shing, Asia’s richest tycoon, had put a valuation of €1.8bn-€2.5bn on the sale of a 20-25 per cent stake in 3 Italia in documents filed with regulators. “That is how much they are raising. It is a fairly aggressive target, but it is a sign of their confidence in the future of the business,” said a person close to the situation.

The proposed range is higher than original analyst expectations for an initial public offering of €1bn-€1.5bn and could turn the listing of the business, which has about 4.5m customers, into Italy’s biggest IPO so far this year.

The listing of 3 Italia – the first ever by a third-generation mobile phone business – will set a benchmark for other 3G operators and could pave the way for the spin-off of Hutchison 3G’s operations in the UK next year.

The ports-to-retail conglomerate on Tuesday confirmed it had filed an application to the Italian stock exchange to list 3 Italia by the end of this year. A successful listing of the Italian business would partially vindicate Hutchison’s controversial decision to spend €18bn on its five-year foray into 3G – a move that took away financial resources from its other businesses.

However, analysts said the ports-to-retail conglomerate could find it hard to convince investors to value a business that is not expected to report a significant profit for at least two years, at up to €12.5bn, excluding debt of €5bn.

Although Italy accounts for almost half of Hutchison’s 9.4m 3G subscribers, its average revenue per user in the country was the lowest among its operations in Europe and Australia, at €35.78, compared with the average €43.11.

People close to Hutchison have said that the company will tell investors the business is on the verge of explosive earnings growth as more and more customers move to higher-margins services such as video and internet.

As a result, 3 Italia should command a premium to traditional mobile phone operators and be valued in line with media groups, they added. However, some analysts warn that 3G is coming under attack from newer technologies, such as internet telephony and wireless internet.

Hutchison also confirmed it had hired Goldman Sachs, HSBC, JPMorgan, Merrill Lynch, Morgan Stanley to arrange the listing.

The Italian groups Banca IMI and Banca Caboto will also underwrite the IPO, with Lazard as 3 Italia’s financial adviser.

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