At least things are proceeding as planned. But the Brazilian blitz of Telefonica has left its mark: the board of Telecom Italia has not received a response to the "hostile move" of the Spanish shareholder, as defined by the president of Cdp Franco Bassanini. CEO Marco Patuano, speaking to analysts, responded to requests for comment as follows: "We will be rational, but all options remain open". Especially if the executive follows up with deeds the words of Undersecretary Graziano Del Rio, who underlined the government's interest in telecommunications. For now, however, just keep going. “We have not initiated any mergers or acquisitions – added Patuano -. Someone else did. We continue with our plan."
While waiting to absorb the shock, the Telecom Italia board (which does not include Telefoica representatives) took note of the accounts for the first semester from which emerges, according to analysts, a reassuring improvement of mobile. But nothing more. Telecom Italia will also have to deal with a declining domestic market in the coming months: the combined effect of the slowdown in traditional services and the growth of broadband "will determine a further decline in the domestic market but growth in the Brazilian market".
In summary, in the second quarter revenues amounted to 5,36 billion (-11%), the ebitda to 2,15 billion (-7%) and the net profit to 321 million. Debt then fell slightly, to 27,4 billion euros, in line with consensus forecasts.
"The group's half-year results are slightly below our expectations in terms of revenues and ebitda while the net income and debt are better than expected," commented in a note by the analysts of Banca Akros (accumulated and target price at 1,05 euro). Akros itself believes a countermove on Gvt is unlikely: “It is probably too late, given that the range of strategic options is shrinking. A potential bidding war on GVT would, in our view, be very negative for the stock on the stock exchange”.
Even the analysts of Imi Bank consider a counter-offer unlikely, which would require “an even higher premium (Telefonica's offer on GVt implies an ev/ebitda multiple of 9,5 times against a 2014 average of 5,2 times, editor's note) and that to finance the operation would require a capital increase of Tim Brasil, which in our opinion should be accompanied by the announcement of strong exploitable synergies to be accretive in terms of value, which is not an easy task”, they assessed Banca Imi.
More possibilities the analysts of Kepler Chevreux (buy and target price at 1 euro): TI's management must consider a counter offer on Gvt since Tim Brasil cannot preserve its value by remaining a pure mobile player. But this would still require a capital increase that is difficult to propose today.
