Exclusive report - Sources say INWIT investors are raising funds for a possible privatization deal

Added share price performance in paragraph 7

Elvira Pollina/Amy-Jo Crowley/Valentina Za

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

According to the sources, French private equity firm Ardian and investment entity Oak Holdings 1 (the latter backed by co-investors GIP, Vodafone VOD.L, and KKR KKR.N) are exploring plans to buy out minority shareholders of INWIT.

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

The sources said these investors are in talks with banks about financing an offer to acquire the remaining shares, with one person adding that Abu Dhabi's investment company Mubadala is expected to take a stake in INWIT as part of the plan.

The sources cautioned that discussions are ongoing.

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

A spokesperson said that the company has no information on the matter at this time.

Following the report, INWIT's shares rose about 4% on Monday.

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

Since then, INWIT has become embroiled in a dispute with its two main clients—Telecom Italia (TIM) TLIT.MI and Fastweb SCMN.S, a unit of Swisscom (link). Both companies have initiated procedures to terminate their contracts with INWIT, aiming to renegotiate under more favorable terms.

According to data from the London Stock Exchange Group (LSEG), as of the end of the last trading day, INWIT's market capitalization had fallen about 27% over the past year, closing at $7.1 billion (€6.3 billion) on Friday.

(1 euro = $1.1201)

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