Telecom Italia may acquire Hutchison's 3 Italia

Telecom Italia SpA, the nation’s biggest phone company, may acquire 3 Italia SpA, the local wireless operator owned by Li Ka-shing’s Hutchison Whampoa Ltd, Corriere Della Sera reported, without saying where it got the information.

Goldman Sachs Group Inc and Bank of America Merrill Lynch are working on a merger plan without a formal mandate, the Italian newspaper said today. 3 Italia would be valued at euro 4.3 billion ($6.1 billion) including some tax losses, the report said, citing an estimate by Deutsche Bank AG.

A spokesman for Milan-based Telecom Italia declined to comment, asking not to be named because of company policy. Laura Cheung, a spokeswoman at Hutchison Whampoa in Hong Kong, also declined to comment. A 3 Italia spokeswoman said the company doesn’t comment on market speculation.

Telecom Italia may sell new stock at euro 1.80 a share to Hutchison, which in turn may “confer” the shares to Telecom Italia’s controlling investor, Telco SpA, Corriere said, citing a Deutsche Bank proposal.

Telecom Italia rose 1.4 per cent to 84.3 cents at 9.56 am in Milan, giving the company a market value of euro 15.7 billion. Hong Kong-based Hutchison Whampoa slid 1.2 per cent to HK$90.85 on the city’s stock exchange.

Hutchison’s 3 Italia earned euro 96 million before interest and taxes in 2010, as service revenue rose four per cent to euro 1.7 billion, the Hong Kong company reported in March. The Italian unit, the country’s fourth-biggest wireless company, had 9.1 million subscribers as of March 28, it said.

The control of 3 Italia has come up as a subject of speculation before. Chief Executive Officer Vincenzo Novari told Il Sole 24 Ore in November 2008 that his company and Telecom Italia discussed a merger plan and dropped it after failing to agree on the price. The companies were also concerned about antitrust approval, he was quoted as saying.

Last month, Egyptian billionaire Naguib Sawiris said Wind Telecomunicazioni SpA is “open to a possible integration” with a telephone company in Italy, also citing 3 Italia.