Italy's Enel hammers out Infostrada deal-source
(UPDATE: Adds, France Telecom banker meeting in Paris, details, share price)
By Alberto Sisto
ROME, Oct 9 (Reuters) - Italian power giant Enel has effectively completed a complex deal to buy Italy's number two telecoms group Infostrada from British-based cellphone giant Vodafone Group Plc (quote from Yahoo! UK & Ireland: VOD.L), an industry source said on Monday.
``A deal has been reached,'' the source told Reuters. ``The only thing missing is a final review of the text.''
The source said Enel would initially buy Infostrada without the help of France Telecom , its joint venture partner in Italy's third biggest telecoms group Wind, in a deal tipped to be valued at around 11 billion euros ($9.6 billion).
But the source confirmed that France Telecom would enter the deal at a later stage.
France Telecom, which owns 43.5 percent of Wind, said in Paris that it was unaware of any deal having been struck, saying only: ``Ask Enel.''
Enel declined to comment. But the industry source said Europe's largest listed power group, was likely to use an acquisition vehicle to buy Infostrada in a deal expected to be completed by February 2001 -- barring any last minute hitches.
Vodafone, the world's biggest mobile phone company, has been expected to clinch the sale of Infostrada since beginning exclusive talks with Wind on September 12.
But amid increasing tension between Enel and debt-laden France Telecom over the purchase price, industry sources said last week the French giant might take part in a two-stage acquisition, leaving Enel to secure an initial deal alone.
Enel's shares extended their losses, falling almost two percent to 4.46 euros by 1126 GMT.
MINORITY DISCOUNT
The terms under which France Telecom will join the deal remain unclear. Sources have said Enel had been considering offering ally France Telecom a ``minority discount'' to help secure an eventual joint acquisition of Infostrada.
Such a discount -- one of several options being weighed to secure a three-way deal -- could allow France Telecom to pay less than initially expected since it is the minority shareholder in Wind.
But amid an increasingly wide rift over purchase terms between the French telecoms giant and Enel, some industry sources had put the chance of French participation in any joint purchase at just 60 percent.
France Telecom is reluctant to pay large amounts of cash for Infostrada, partly because it is focused on mobile expansion and would have trouble marrying Infostrada's Internet capabilities with its own, separately-traded Internet business in France.
But analysts say France Telecom risks clouding the future of its Italian operation by not taking part in a major acquisition mounted by its joint venture partner, which wants to boost its telecoms business to become the main challenger to Telecom Italia .
Meanwhile, banking sources in Paris said France Telecom was meeting with its bankers to discuss a five billion euro add-on loan to its existing debt.
(Additional reporting by Catherine Bremer and Sophy Tonder in Paris) |
