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Sawiris has eyes on Italian and French deals

Egyptian telecoms magnate offers to back rights issue at Telecom Italia, and is interested in Vivendi's SFR unit


Published: 19 November, 2012

READ MORE: M&A | Europe

Egyptian telecoms investor Naguib Sawiris has a long history of shaking up sleepy telecoms markets with well-timed acquisitions. Europe, where he has been a player on the sidelines, is now in his sights amid the eurozone crisis, with Italy and France his rumored targets.

Sawiris - whose Orascom Telecom vehicle previously owned Italian cellco Wind, sold with a broad range of mobile assets to Russia's VimpelCom - wants to obtain a stake in Telecom Italia and has now offered to underwrite a rights issue. This could allow the incumbent telco to reduce its debt and fund acquisition of Brazilian telecoms group GVT. Sources say Sawiris could invest more than €2bn, which would dilute Telefonica's stake. Together with three financial institutions, the Spanish telco owns 22% of its Italian counterpart via a holding firm called Telco SpA.

The main reason for Telecom Italia to accept the deal would be to buy GVT, a move which COO Marco Patuano described as a "quantum jump". Speaking at a Morgan Stanley conference last week, he said: "An asset like this is for sale once every I don't know how many years."

Across the border in France, media conglomerate Vivendi has been considering the sale of its mobile arm SFR, with various candidates rumored including former joint venture partner Vodafone. Now Sawiris may be interested in this operator too, according to the Financial Times. The billionaire told the newspaper that he was looking at SFR in a deal that could be valued at €13bn to €14bn.

However, he admitted the likely price tag was too high for him to fund single-handed and the deal would be carried out through a subsidiary - and many think a joint venture is more likely. Analysts at investment house Jefferies value SFR at €13.7bn, or 4.5 times the cellco's EBITDA in 2013.

Vivendi's CFO Philippe Capron told Reuters: "Everyone is talking to everyone and we have to talk to various parties to look at our options."

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