EXCLUSIVE Italy announces mergers and acquisitions as government prepares to cut Rai Way stake – sources

Italy’s Prime Minister Mario Draghi talks to the media as he arrives for the EU-Africa summit at the European Council building in Brussels, Belgium February 17, 2022. Geert Vanden Wijngaert/Pool via REUTERS/

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  • State television abandons majority of Rai Way towers unit
  • Decree clears way for Rai Way-EI Towers merger
  • Analysts see an extraordinary dividend from Rai Way in the merger
  • Potential merger resisted by some ruling politicians

ROME, March 7 (Reuters) – Prime Minister Mario Draghi has approved a decree allowing Italian state broadcaster RAI to cut its stake in towers unit Rai Way (RWAY.MI) below 51%, officials said. three government officials. consolidation of the sector.

The decree could pave the way for merger talks between Rai Way and EI Towers, officials said, a longstanding tie-up that would create a group worth more than 2 billion euros ($2.2 billion). dollars) in the television and radio aerial sector.

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.

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The decree must be approved by the Italian Court of Auditors before it can take effect, the sources told Reuters.

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.

“If it had been done at that time, there could have been synergies on investments to reallocate spectrum bands,” said Stefano Gamberini, principal analyst at Equita SIM.

“But a merger would still create a more profitable player with greater cash-generating capacity.”

RAI owns 65% of Rai Way, while EI Towers is now controlled 60% by the F2i fund and 40% by MediaForEurope (MFE) (MFEA.MI), (MFEB.MI), which is the new name of Mediaset .

The book value of MFE’s 40% stake in the unlisted EI Towers is approximately €437 million, based on MFE’s 2020 financial statements, implying an overall valuation of the EI Towers at over one billion euros.

Listed in 2014, Rai Way has a market capitalization of approximately 1.3 billion euros.

Gamberini said Rai Way’s very low debt burden, currently in line with its core profit, would increase under a combination with EI Towers, but still leave room for an extraordinary dividend which Equita estimates. be able to exceed 1 euro per share.

RAI has traditionally been subject to political influence and the potential merger of its towers with a private player is contested by several ruling politicians.

Michele Anzaldi, an MP for Renzi’s Italia Viva party and a member of an influential parliamentary committee overseeing the state broadcaster, told Reuters the government’s decision was “a serious step, taken without any transparency on the use of this extra money in RAI coffers.”

According to one of the sources, the governance agreements between RAI and the shareholders of Rai Way’s future merger partner will guarantee Italian strategic interests in any transaction.

Draghi’s office, RAI and F2i declined to comment. Rai Way, EI Towers and MFE were not immediately available for comment.

($1 = 0.9198 euros)

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(Reporting by Giuseppe Fonte, additional reporting by Elvira Pollina, editing by Alexander Smith and Mark Potter)

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