EX-99.8 9 a07-28076_1ex99d8.htm EX-99.8

Exhibit 99.8

 

JOINT PRESS RELEASE

 

MILANO, 28th APRIL 2007 - A group of Italian investors made up of Assicurazioni Generali, Intesa Sanpaolo, Mediobanca and Sintonia SA, together with the international player Telefonica SA as minority partner, reached today an agreement with the Pirelli group, Sintonia S.p.A. and Sintonia SA for the purchase of the entire share capital of Olimpia at a provisional price of 4.1 billion euro.

 

The objectives of the transaction are:

 

•                  creating value over time for all shareholders, by accompanying Telecom Italia’s business growth strategies which will be defined in full autonomy by the Board of Directors and the management of Telecom Italia;

 

•                  strengthening and stabilizing the ownership structure of Telecom Italia, thanks to the commitment of important Italian institutional shareholders with a medium-term investment horizon and the financial support of one of the major international telecom players;

 

•                  ensuring greater financial flexibility for Telecom Italia.

 

The offered consideration, to be paid in cash at the closing (forecasted within the end of 2007), implies the valuation of Olimpia’s equity investment in Telecom Italia at a unit price of 2.82 euro for each Telecom Italia ordinary share, for a countervalue of approximately 6.8 billion euro, gross of the net debts of Olimpia SpA.

 

The purchase contract is conditional upon the authorizations and approvals of competent authorities.

 

The acquisition will occur via a newco, Telco S.p.A., destined to absorb Olimpia SpA, which, after the transaction will hold an approximately 23.6% stake in the voting share capital of Telecom Italia, 18% of which acquired via Olimpia and 5.6% of which contributed by Generali and Mediobanca.

 

Initially Telco will therefore be capitalized with:

 

•                  1,373 million euro, through a contribution of Telecom Italia shares by Generali (542.8 million shares, equal to 4.06% of Telecom Italia’s ordinary share capital, valued 2.53 euro each);

 

•                  522 million euro through a contribution of Telecom Italia shares by Mediobanca (206.5 million shares, equal to 1.56% of Telecom Italia’s ordinary share capital, valued 2.53 euro each);

 

•                  522 million euro contributed in cash by Intesa Sanpaolo, in line with the contribution values of Generali and Mediobanca;

 

•                  412 million euro contributed in cash by Sintonia SA, in line with the contribution values of Generali and Mediobanca;

 

•                  2,314 million euro contributed in cash by Telefonica SA;

 

•                  a bridge financing up to a maximum of 900 million euro in view to a further increase in the share capital of Telco, to be carried out after the closing of the transaction, and which may be subscribed proportionally by the Italian investors and Telefonica.

 

As a result of the transaction and before the increase in share capital, Italian shareholders will hold a 57.7% stake, broken down as follows:

 

•                  Generali, 28.1%;

 

•                  Intesa Sanpaolo, 10.6%;

 

•                  Mediobanca, 10.6%;

 

•                  Sintonia SA, 8.4%.

 

Telefonica will hold the remaining 42.3% of Telco’s share capital.

 

As part of the subsequent increase in share capital Intesa Sanpaolo may, with the reasonable approval of the other Telco shareholders, indicate new primary Italian financial investors, which may join Telco’s shareholders by acquiring newly-issued shares for a cash consideration, with individual equity stakes ranging between 2% and 5%.

 

Shareholders may over time make further contributions of Telecom Italia shares within the overall limit of 30% of the ordinary share capital of Telecom Italia, considering also the Telecom Italia shares which may be directly held by Telco shareholders.

 


 

Shareholder agreements and the Articles of Association of Telco will set forth that:

 

•                  the Chairman of Telco be indicated in agreement by Italian shareholders;

 

•                  governance be articulated according to the criteria of proportionality between shareholders, with the usual protections and qualified majorities required for particularly significant transactions (including mergers, acquisitions, spin-offs, sales of Telecom Italia shares and vote in the latter’s Extraordinary Shareholders’ Meetings);

 

•                  pre-emptive rights between all shareholders, with the subordination of pre-emption of Telefonica with respect to pre-emption between the Italian shareholders.

 

Shareholder agreements ensure full independence of the management of Telecom Italia with respect to the shareholders of Telco. Any collaboration agreements between Telecom Italia and Telefonica are left to the sole and exclusive judgment of the competent deliberative bodies within the two groups.

 

In particular, as concerns the majority list for the designation of Telecom Italia Directors, agreements provide for the fact that they will be indicated by Telco according to criteria of professionalism and experience. 13 proposed Telecom Italia directors will be indicated jointly by Italian shareholders and two, with non-executive roles, by the partner Telefonica.

 

The agreements shall last three years, at the end of which, without prejudice to renewal, each shareholder may obtain the spin-off of its stake in Telco and the pro quota assignment of Telecom Italia shares and any relative debt.

 


 

Telefonica

 

 

 

28/04/07

 

Creating a consortium, now the largest shareholder in the Italian operator with 23.6% of the capital

 

TELEFÓNICA, MEDIOBANCA, GENERALI, INTESA SANPAOLO AND BENETTON UNITE TO TAKE A STAKE IN TELECOM ITALIA

 

•                                          The company, presided over by César Alierta, will have two board members and an indirect participation of 10% in Telecom Italia

Madrid, 28 April 2007.- The Board of Directors of Pirelli, in an extraordinary meeting held today, and Edizione (Benetton Group), have agreed to sell their stakes in Olimpia, principal shareholder of Telecom Italia, to a consortium made up of Telefónica, the group’s industrial partner, the insurance company Generali, the banks Mediobanca and Intesa Sanpaolo, and Benetton (partially reinvesting in the consortium). The operation is subject to the mandatory authorisations.

 

The new consortium, in which Telefónica holds 42.3% of the shares, will have a 23.6% participation in Telecom Italia’s capital (18% indirectly through Olimpia and 5.6% directly), thus becoming the largest shareholder of the Italian operator. The other members of the consortium have the following shareholdings: Generali (28.1%), Mediobanca (10.7%), Intesa Sanpaolo (10.7%) and Benetton (8.2%).

 

The new company starts out with a capital structure of 5,145 million euro, representing a 2,314 million euro investment for Telefónica. An additional capital increase of 900 million euro is foreseen in which Telefónica will have the right to subscribe for new shares on a pro-rata basis, in accordance with its current participation.

 

The agreement enables Telefónica to enter Telecom Italia’s Board with two members, a number proportionate to its 10% economic interest in the company. In the new company, Telefónica will have the right of first refusal on the sale of shares, as well as veto rights in certain decisions related to share ownership changes, dividend policy and divestitures.

 

This operation enables Telefónica to both strengthen its relationship with Telecom Italia, with whom it has entered into cooperation agreements in Germany, and to reinforce its position in Europe and Latin America. Nonetheless, the two companies (Telefónica and Telecom Italia) will be managed separately and independently and it is foreseen that both Telefónica and the board members it appoints will abstain from participating and voting in meetings of the relevant corporate bodies whose purpose is to consider business decisions related to countries in which both companies have a presence.

 


 

As a result of meetings with the Italian operator, Telefónica and Telecom Italia foresee the generation of synergies which would give rise to costs savings for both companies.

 

This investment in no way alters Telefónica’s commitment to the markets with respect to limiting its financial investments this year to a net total of 1,500 million euro.

 


 

 

Telefonica

 

Shareholder Structure

 

 


 

Telefonica

 

ANNEX:

 

Newco investment:

 

100% Olimpia (2.82 euros/share)

 

4,118 Million euros

 

5.6% in TI (2.53 euros/share)

 

1,897 Million euros

 

Total

 

6,015 Million euros

 

 

Newco sources of funds:

 

Telefónica

 

2,314 Million euros

 

Mediobanca (in kind)

 

522 Million euros

 

Generali (in kind)

 

1,375 Million euros

 

Intesa

 

522 Million euros

 

Benetton

 

412 Million euros

 

Total equity

 

5,145 Million euros

 

Net debt (1)

 

870 Million euros

 

Total sources

 

6,015 Million euros

 

 

 

For further information, please contact:

 

 

Investor relations

 

 

Telf: (+34) 91 584 4713 - (+34) 91 584 4700

 

 

Ezequiel Nieto

ezequiel.nieto@telefonica.es

 

Dolores García

dgarcia@telefonica.es

 

Diego Maus

dmaus@telefonica.es

 

(1) To be reduced through a potential capital increase of up to 900 Million Euros to be executed in the 6 months following the completion of the deal