HELSINKI, Finland-Tele2, Sweden’s second-largest telecom operator after Telia, has confirmed plans to present a joint bid with London-based Star Capital Partners to acquire Italian mobile operator Blu’s network. A sale has been in the cards since 2000, when Blu failed in its attempt to win a Universal Mobile Telecommunications System (UMTS) license.
Aside from Tele2-Star Capital Partners, two other contenders are ready to present bids for Blu’s mobile network. These include Anthill, the Italian telecom consortium, and the telecom consultancy company E-Do. The asking price for Blu’s network is around US$1.2 billion.
The announcement happens in a backdrop where Italy’s Telecommunications Minister Maurizio Gasparri told a meeting of Italian legislators in Rome that it is the government’s wish that Blu be sold in parts.
However, the European Commission (EC) has already informed the Italian government that it would oppose any such move. “We do not believe that the sale of Blu in many sections would help competition in Italy’s mobile telecom market,” said EC President Romano Prodi.
“I have written to EC President Romano Prodi about the impasse, and I certainly hope this issue can be resolved and soon,” said Gasparri.
Italy’s fourth-largest cell-phone company, Blu is controlled by British Telecom and Edizione Holding, an investment holding company owned by the Benetton family, one of Italy’s leading industrial conglomerates.
The section-by-section divestment strategy preferred by the government is also supported by Blu’s board. The proposal is likewise favored by the Tele2-Star Capital Partners consortium.
In May, Blu’s board adopted a plan under which the company’s assets would be sold to its principal market competitors in Italy. Under this plan, certain business units would be sold to Telecom Italia Mobile (TIM), Vodafone-controlled Omnitel, Wind and H3G, a new third-generation (3G) cell-phone entrant owned by Hong Kong-based Hutchison Whampoa.
This proposal encountered a major setback when the EC described it as “inappropriate.” The EC advised Blu’s board to “try harder to find a single buyer for Blu’s operations.”
