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Exclusive-Italy moves to cut Rai Way stake, triggering towers M&A -sources -Breaking

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© Reuters. FILEPHOTO: Mario Draghi (Italian Prime Minister) speaks with media during his arrival at the EU-Africa summit in Brussels, Belgium on February 17, 2022. Geert Vanden Wijngaert/Pool via REUTERS

By Giuseppe Fonte

ROME (Reuters). – The decree allowing Italy’s state broadcaster RAI, to reduce its holdings in Rai Way towers units below 51% has been approved by Prime Minister Mario Draghi, according to three officials from the government. This move is expected to lead to sector consolidation.

Officials said the decree may open the door to merger discussions between Rai Way (EI Towers) and EI Towers. This would be a long-awaited tie-up, which could create an organization worth over 2 billion euros ($2.2billion) in the radio and television mast sectors.

Rome has reversed a 2014 Italian provision that stipulated Rai Way must remain in public hands at 51%. It was deemed important because of the strategic significance of its infrastructure.

Sources told Reuters that the decree must be approved by Italy’s Audit Court before it is allowed to enter into effect.

EI Towers attempted to takeover Rai Way in 2015. However, this bid was stopped by Matteo Renzi’s centre-left coalition government.

It was then that Silvio Berlusconi, the former conservative prime minister, controlled EI Towers via broadcaster Mediaset (OTC). Renzi didn’t want Rai Way assets to be taken over by Mediaset.

Rai Way is 65% owned by RAI, and EI Towers now has 60% control by fund F2i. 40% is held by MediaForEurope(MFE), Mediaset’s current name.

Based on MFE’s 2020 financial statements MFE estimates that the book value of MFE’s 40% share in unlisted EI Towers amounts to around 437m euros. This implies an EI Towers total valuation at over 1 billion euros.

Rai Way, which was listed on 14 April 2014, has a market capitalization of about 1.3 million euros.

One source said that governance agreements between RAI shareholders and Rai Way’s potential merger partner will protect the strategic interests of Italy in any deal.

F2i, RAI and Draghi’s offices declined to comment. MFE, EI Towers and Rai Way were not available immediately for comment.

RAI was historically subject to political influence. Some ruling politicians oppose the merger of RAI’s towers arms with a private party.

Michele Anzaldi is a lawmaker representing the Italia Viva centrist party, led by Renzi. He told Reuters that he’d like to ask the government for clarifications on its plans for Rai Way.

Anzaldi stated that there is no “dogma”, but it was important to comprehend the industrial reasoning behind any deal.

($1 = 0.9198 euros)

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