Hong Kong-based Hutchison to acquire 10% stake in Telecom Italia

Hutchison Whampoa Ltd (HKG:0013) is likely to acquire an up to 10% interest in Telecom Italia SpA (BIT:TIT) as part of a possible deal to combine its wireless unit H3G SpA with the Italian telecommunications group, daily La Repubblica reported.

The paper, which did not cite any sources, added that such a deal would dilute the stake of holding company Telco SpA, which currently owns 22.4% in Telecom Italia, to some 20%.

On Friday, Telecom Italia said that it was in preliminary talks with Hutchison Whampoa over a possible combination with H3G, also known as 3 Italia SpA, adding that its board would discuss the issue during its meeting on 11 April. H3G is valued between EUR1.5bn (USD1.9bn) and EUR2bn, Reuters said, citing analysts’ estimates.

According to a report by another Italian daily, Il Sole 24Ore, which quoted unnamed sources, a possible deal would be in cash and stock and would give Hutchison not more than 20% in Telecom Italia. Daily La Stampa said that the owners of Telco — Telefonica SA (MCE:TEF), Assicurazioni Generali SpA (BIT:G), Intesa Sanpaolo SpA (BIT:ISP) and Mediobanca Group (BIT:MB) — would be interested in such a transaction.

Reuters could not immediately contact Telecom Italia, as well as spokespersons for the Italian owners of Telco for comment. A spokesman for Telefonica refused to comment.