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T.Italia seen shedding Argentine stake-sources
Reuters
June 24, 2009

By Stefano Rebaudo

MILAN, June 24 (Reuters) - Italy's No. 1 telecom operator Telecom Italia (TLIT.MI: Quote, Profile, Research, Stock Buzz) is likely to sell its stake in its Argentinian unit, which is caught up in a probe by local antitrust regulators, two industry sources close to the matter said.

Telecom Argentina (TEC2.BA: Quote, Profile, Research, Stock Buzz), one of Argentina's top phone companies, is controlled by Telecom Italia along with an Argentine investor group led by the Werthein family. It is being probed by Argentine authorities because a Telecom Italia shareholder, Spain's Telefonica (TEF.MC: Quote, Profile, Research, Stock Buzz), runs a rival local operator.

"Things are heading towards a sale, as long as there is no political change or a change of strategy by the government, which seems improbable to me," said one industry source, referring to upcoming parliamentary elections in Argentina.

Argentine regulators have frozen Telecom Italia's call option on Telecom Argentina as part of the antitrust probe, and the country's centre-left government has named two officials to oversee the running of the company.

The source confirmed an Argentine report that Telecom Italia had hired Credit Suisse to evaluate a sale of its stake. Telecom Italia has declined to comment on the report, but in the past has not ruled out a sale. [ID:nLM221653]

Telecom's 50 percent stake in Sofora, the holding company that controls Telecom Argentina (TEC2.BA: Quote, Profile, Research, Stock Buzz), is expected to be worth up to 300 million euros ($415.7 million), an Italian newspaper has said.

A sale of the stake will likely have ramifications for the Italian company's sale of its German broadband unit Hansenet -- which Telefonica is bidding on -- and where Telecom Italia has received less than satisfactory offers, said the source.

A Telecom Italia exit from Argentina would leave the field open to Telefonica to become the top operator there, the source said, which in turn could allow the Spanish company to be more generous in its bid for Hansenet.

"Telecom Italia is looking at Argentina with an eye towards Germany and another towards Spain," said the source.

Vodafone (VOD.L: Quote, Profile, Research, Stock Buzz) and United Internet (UTDI.DE: Quote, Profile, Research, Stock Buzz) are others eyeing Hansenet, according to sources familiar with the matter.

"The road seems to be marked ... the advantages seem to be for the Spanish partner," said a second industry source.

Telecom Italia, which Telefonica controls along with a group of Italian investors, has been selling off assets to cut debt. (Writing by Deepa Babington; Editing by Rupert Winchester)

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