ROME (Reuters) – Italy has decided that public broadcaster RAI should retain a stake of at least 30% in its Rai Way towers unit, a draft government decree seen by Reuters said on Wednesday.
Reuters reported on Monday that Italian Prime Minister Mario Draghi had signed a decree authorizing RAI to reduce its 65% stake in Rai Way to less than 51%, which should trigger a consolidation in the sector.
The executive order could pave the way for merger talks between Rai Way and rival EI Towers, a longstanding tie-up that would create a group worth more than 2 billion euros ($2.2 billion) in the sector of television and radio antennas.
RAI can reduce its stake in Rai Way “within the limit of 30%” while “retaining control of such strategic infrastructure”, the decree says, adding that the tower company should remain listed.
Shares of Rai Way were up 2.2% at 12:33 GMT, after closing up 5.86% on Tuesday.
Intesa San Paolo analysts said in a report that the 30% threshold “should not prevent a consolidation with EI Towers and its potential for synergies.”
Banca Akros estimated that EI Towers had around 600 million euros in net debt more than Rai Way, adding that this meant that in a merger of equals between the two tower groups, RAI would remain “well beyond” the new limit of 30%.
The decree lists the means by which RAI can discharge the stake, including “one or more extraordinary merger agreements”, direct negotiation or a public offer, without setting a deadline for any of the options.
Rome is reversing a provision made in 2014, when Italy decided that at least 51% of Rai Way must remain public property due to the strategic importance of its infrastructure.
EI Towers launched a takeover bid on Rai Way in 2015, but it was thwarted by the centre-left coalition government of former Prime Minister Matteo Renzi.
At that time, the family of former Conservative Prime Minister Silvio Berlusconi controlled EI Towers through broadcaster Mediaset and Renzi did not want to see the media mogul take control of Rai Way’s assets.
EI Towers is now 60% controlled by the F2i fund and 40% by MediaForEurope, the new name of Mediaset.
(Reporting by Giuseppe Fonte; Editing by Edmund Blair, Keith Weir, Kirsten Donovan)
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