Italian financial mystery
VERONA - Why to merge Telecom Italia and Tim? Why now? Why start an initiative aimed at reducing the group's debt and that seems to pass through an increase in debt? Why to risk a reduction of the major shareholders' control over the group? Why they do this all in such a hurry?
Olimpia shareholders will have to spend about 1.5 billion euro (or even more) if they want their company to mantain its 17 per cent of Telecom Italia. They have registered Telecom Italia's shares at 5.21 euro, very far from the present value of 2,9 euro. And even after all this, they will probably register the shares at 4.5 euro. Do they really think that Telecom Italia will rally until they make money with that stock?
Pirelli, Benetton, Gnutti: maybe they all really think that by buying now Telecom Italia, merged with Tim, they will gain. After all, the cash rich Tim will be nearer to them. But is that really worth all the risk and cost of the operation? Only that?
Dividends from Tim will serve the debt. Tim shareholders saw their company blocked until now in its competitive strenght because of the debt. And they will continue to see the same.
This is what is understandable. Which is not much.
Is it worth the effort? To spend 1.5 or even 2 billion in Olimpia, and to increase Telecom Italia's debt by at least 8 billion, to 38 billion, is it worth the effort?
We don't know exactly what will happen to all those billion that will pass from bank to bank, from consultancy to consultancy, from hand to hand. And we don't know if at the end Tim will be separated again to be quoted with a new debt burden for itself.
What we do know is that Italian finance is always an evident mystery. Is it different because of the mystery or because of the fact that the mystery is evident? Probably the only explanation of the hurry is that somebody well informed has already found the way to speculate on the operation.
This does not mean that it will be a wrong operation. But it is only a financial operation. And a power operation. When will the business operation come out?
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