Review Draft - Exclusive Report - Sources say INWIT investors are raising funds for a potential privatization deal

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Elvira Pollina/Amy-Jo Crowley/Valentina Za

Reuters Milan/London, October 12 - According to two sources familiar with the matter, the main shareholders of INWIT INWT.MI are raising funds for a potential privatization deal of Italy's largest mobile communications tower company. Previously, the company was embroiled in a contract dispute with its two major clients (link).

The sources said that French private equity firm Ardian and investment vehicle Oak Holdings 1 (supported by co-investors GIP, Vodafone VOD.L and KKR KKR.N) are exploring a plan to acquire the minority shareholders’ stakes in INWIT.

Ardian holds a 32% stake in INWIT, while Oak Holdings owns 39%.

According to the sources, these investors are in talks with banks to finance the takeover offer, with one adding that as part of the plan, Abu Dhabi investment firm Mubadala is expected to take a stake in INWIT.

The sources cautioned that discussions are still ongoing.

Ardian, GIP, Vodafone VOD.L, KKR KKR.N, and Mubadala all declined to comment. GIP is owned by U.S. investment firm BlackRock (BLK.N).

A spokesperson for INWIT said the company has no information on the matter.

INWIT was listed in Milan in 2015, and since February this year, when French media reported that infrastructure fund Ardian and investment group Brookfield were interested in taking the Italian company private, it has been the focus of takeover rumors (link).

Since then, INWIT has become involved (link) in a dispute with its two main clients—Telecom Italia (TIM) TLIT.MI and Fastweb, owned by Swisscom SCMN.S—both of which have started the process to terminate their contracts with INWIT in a bid to renegotiate agreements on more favorable terms.

According to data from London Stock Exchange Group (LSEG), as of last Friday’s close, INWIT’s market capitalization had fallen by about 27% over the past year, down to $7.1 billion (6.3 billion euros).

(1 euro = $1.1201)

(To facilitate non-native English speakers, Reuters has automatically translated its reports into several other languages. Because automated translation may contain errors or lack necessary context, Reuters does not guarantee the accuracy of the translated text and provides it only for reader convenience. Reuters assumes no responsibility for any damage or loss caused by the use of automated translation functions.)