Swisscom Gains on Speculation Italy Unit Fastweb Is Put on Sale
Oct. 8 (Bloomberg) — Swisscom AG gained the most in two years in Zurich trading on revived speculation that the phone company may be considering a sale of its Italian unit Fastweb.
Vodafone Group Plc remains interested in buying the business, a person familiar with the matter said, asking not to be named discussing internal deliberations. Swisscom is working with UBS AG to facilitate a transaction, Reuters reported, citing sources it didn’t name.
Fastweb is one of the few sizable landline networks in Europe that may come up for sale, after Vodafone acquired Germany’s Kabel Deutschland Holding AG and Grupo Corporativo ONO SA in Spain in the past year. A disposal of the asset — with a book value of 2.9 billion euros ($3.7 billion) — could help Swisscom reduce capital spending and pay a special dividend, according to Ute Haibach, an analyst at J. Safra Sarasin.
“The rumors about a possible sale of Fastweb are not new and are popping up frequently since July 2013,” Haibach wrote in a note today. “Because of potential synergies, Fastweb is likely to be worth more to Vodafone than it is to Swisscom.”
Sepp Huber, a spokesman for Bern-based Swisscom, declined to comment.
Bloomberg News reported in June last year that Vodafone was considering an eventual acquisition of Fastweb. The Newbury, England-based company made informal approaches that year and in 2011 that were rejected by Swisscom, two of the people said at the time.
Swisscom climbed 3.4 percent to 551 Swiss francs at 11:05 a.m., after rising as much as 4.5 percent for its biggest intraday gain since May 2012. The carrier has a market value of 28.5 billion francs ($30 billion).
Swisscom bought the unit for 4.6 billion euros in 2007, seeking to make up for slowing growth in Switzerland, where it made 82 percent of its revenue last year. The deal failed to reverse Swisscom’s fortunes, and the company had its first quarterly loss in about a decade in 2011 due to a 1.2 billion- franc writedown related to Fastweb.
Chief Financial Officer Mario Rossi said in July that Swisscom would hold on to Fastweb as investments are starting to pay off and the unit is likely to grow.
–With assistance from Cornelius Rahn in Berlin.
To contact the reporters on this story: Thomas Mulier in Geneva at tmulier@bloomberg.net; Amy Thomson in London at athomson6@bloomberg.net To contact the editors responsible for this story: Kenneth Wong at kwong11@bloomberg.net Robert Valpuesta, John Bowker
