RealTime IT News

Merger Plans Unveiled for TIN.IT, Seat Pagine Gialle

TIN, the Internet division of Telecom Italia, and the Italian Yellow Pages, SEAT Pagine Gialle, Friday moved towards integration which, according to company executives, will create a leader in European e-economy.

Seat Pagine Gialle has over 600,000 clients in the business sector. These companies have an increasing need to communicate, primarily by Internet. The potential B2B opportunities this presents is the key to Telecom Italia's interest.

In addition to commercial communications, the doors of Seat Pagine Gialle's client base are open wide to e-commerce possibilities. And therein, according to industry leaders, is TIN's strongpoint. With a national network, Internet backbone, and in particularly the recently authorized FastInternet, which uses broadband ADSL technology, Telecom has a definite competitive edge over other ISPs.

The integration proposal substitutes, and improves upon, a project to list shares of TIN. Within the framework of the new offer, however, Telecom Italia ensures privileged treatment for all its shareholders.

Current plans are for Telecom Italia to offer ordinary shareholders of Seat Pagine Gialle an opportunity to adhere to a public tender offer of 4.2 euro per share.

Part of the proposal, currently being studied, may also include in the public tender offer the saving shares of Seat Pagine Gialle at a price that would reflect a 30 percent discount against ordinary share prices. This same discount would be granted to those converting saving shares into ordinary shares.

Robert Colaninno, Chief Executive Officer of Telecom Italia, also announced that a preliminary agreement to increase Telecom Italia's participation in Seat Pagine Gialle to 29.9 percent had been reached, at a price of 4.5 euro per share.

Considering that Telecom already owns 21.07 percent of Huit, which in turn controls 61.33 percent of Seat Pagine Gialle, the increased acquisition by Telecom Italia, according to the Italian financial newspaper Il Sole 24 Ore, will have to be 17 percent.

Most likely, however, the increase will come from internal trading rather than market value. Particularly given the fact that shares of Seat jumped to 5.5 euro following the merger announcement.

Low estimates are that Seat's current value is close to $25 billion. There is currently a tender offer, however, by Italy's Buffetti, which would make the company worth even greater.

Some say, in fact, that the TIN merger would create a company worth nearly $60 billion, with such players as De Agostini, Bain, Comit, Investitori Associati, Bc Partners, and Cvc all holding a portion.

According to a statement by Seat Pagine Gialle, the TIN merger would have no impact on the Buffetti proposal.