Telecom Italia Media not for sale
EmptyROME -- Telecom Italia said Wednesday that it has no plans to sell off or delist its media subsidiary, quashing weeks of rumors that peaked a day earlier, sending Telecom Italia Media shares soaring.
Telecom Italia Media owns La 7 -- the only one of seven national television networks not controlled by either state broadcaster RAI or Silvio Berlusconi's Mediaset -- along with several niche networks including MTV-Italia, Comedy Central-Italia and Nickelodeon-Italia.
Speculation has swirled around possible changes at Telecom Italia Mobile since April, when control of the company switched to a Spanish-Italian consortium led by Spain's Telefonica and three Italian investment banks. Company officials said then that they wanted to focus on Telecom Italia's core telephony and Internet businesses.
Speculation reached a fever pitch Tuesday, when reports appeared in several Italian newspapers suggesting that Telecom Italia Media could be sold for as much as 4 billion euros ($6 billion).
The news sent the shares as much as 7.2% higher in very heavy trading -- a fast enough rise that the Milan-based stock exchange halted trading for about an hour -- before pulling back slightly before the end of the day to finish nearly 5% above opening levels.
But on Wednesday, the company issued a statement denying any plans for the media unit, specifically ruling out any plans to sell Telecom Italia Media or any of its holdings or to de-list the company by buying the public float of 31% of the outstanding shares -- the entire stake Telecom Italia does not own.
Wednesday's news resulted in a 2.1% drop in the Telecom Italia Media share price, though the shares still closed higher than their level before the start of trading Tuesday. The Italian Stock Exchange's Media index went the other way, jumping 1.5% on the day in a generally weak market.
Telecom Italia Media is set to announce its financial results after the market closes Thursday -- another factor that analysts said may be weighing on investor sentiment.
Meanwhile, the question of how Telecom Italia will slash an estimated 37.4 billion euros ($55.7 billion) in debt remains. Rumors about the sale of Telecom Italia Media were based in part on the company's need to reduce its staggering debt load.
The company is set to announce its strategic plan to investors and analysts March 7, at which point analysts said long-term plans for Telecom Italia Media will likely become clearer.