Mediobanca to Withdraw From Telco

By Giovanni Legorano 

Italian lender Mediobanca SpA said Monday it has decided to withdraw from Telco, a holding company controlling a 22.4% stake in Telecom Italia SpA, in a further step toward an exit from its investment in the Italian telecom operator.

In a statement, Mediobanca said it "exercised its right to request the demerger of Telco permitted under the terms of the shareholder agreement." This will leave it with a direct stake in Telecom Italia of 1.6%. Other shareholders in Telco are Intesa Sanpaolo SpA, Assicurazioni Generali and Telefonica SA.

The news comes after Generali said last Wednesday that its board had agreed to withdraw from Telco too. Intesa Sanpaolo had also said in the past it planned to exit Telco and this is likely to lead to the dissolution of the holding company altogether. If this happens, Telefónica will end up becoming the largest single shareholder in the Italian firm, with direct stake of around 15% of Telecom Italia.

This is likely to reignite competition concerns that the Brazilian antitrust regulator has expressed. Both Telefónica and Telecom Italia have important assets in Brazil-- Tim Participacoes and Vivo--and the Brazilian regulator has already said that Telefónica has to get rid of either its stake in Telecom Italia or its other Brazilian asset, Vivo.

Telefónica has tried to ease the Brazilian regulator's concerns by withdrawing its representatives from Telecom Italia's board in December.

However, Telecom Italia isn't willing to let go of Brazilian unit Tim Participacoes, as Chief Executive Officer Marco Patuano has repeatedly said it is a core asset to the company.

Mediobanca's exit from the investment in Telecom Italia is part of the Italian merchant bank's plan to shed part of its large investments in Italian companies, which marks a drastic turnaround from the bank's decadelong strategy.

Last June, the bank said it would have slashed its equity exposure by 2 billion euros ($2.7 billion) by June 2016, selling stakes in companies such RCS Mediagroup and part of its stake in Generali, besides its Telco investment.

Mediobanca started to reduce its stake in Telco in September, with a drop of its holding to 7.3%, from 11.6%.

Write to Giovanni Legorano at [e-mail]

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