Exclusive: Swisscom weighs $6.3 billion Fastweb sale as Vodafone lurks - sources

Tue Oct 7, 2014 3:16pm EDT
 
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By Sophie Sassard, Pamela Barbaglia and Anjuli Davies

LONDON (Reuters) - Telecom operator Swisscom SCMN.VX is considering a possible sale of its Italian broadband firm Fastweb, which is worth up to 5 billion euros ($6.3 billion) and has been a target for Vodafone (VOD.L: Quote), sources familiar with the situation said.

The Swiss majority state-owned firm, which has already rebuffed several takeover approaches from Vodafone (VOD.L: Quote) for Fastweb, is now working with UBS UBSN.VX, Vodafone's long-term adviser, to facilitate a deal, said the sources who could not be named because the matter is private.

Swisscom, Fastweb and Vodafone declined to comment, while UBS was not immediately available for comment.

Swisscom acquired Milan-based Fastweb at an enterprise value of 4.2 billion euros in 2007, and has so far been reluctant to sell the company, which was a pioneer in fiber roll-out in Italy.

Fastweb could be worth between 4 billion and 5 billion euros based on 2013 EBITDA of 620 million Swiss francs (510 million euros) and sector multiples of between 8 and 10, said banking sources.

Another source said that while Vodafone is not currently in talks with Swisscom, it remains interested in acquiring Fastweb and would be open to discussions with Swisscom.

Its long-standing interest in Fastweb and its presence in Italy put Vodafone in a strong position to snap up Fastweb, but other sector players or private equity firms could show interest if Swisscom opted for a deal, said several sector bankers.

Snapping up Fastweb would allow Vodafone, Italy's No. 2 mobile operator, to avoid a time-consuming landline network roll-out and better compete against former monopoly Telecom Italia (TLIT.MI: Quote) for bandwidth-hungry consumers.   Continued...

 
The logo of Swiss telecom company Swisscom AG is seen at an office building in Zurich July 19, 2013.  REUTERS/Arnd Wiegmann