CORPORATE GOVERNANCE

RAI Given Permission To Cut Towers Business Stake By Italian Government

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By Jonathan Easton

The Italian prime minister Mario Draghi has approved a decree that will allow state broadcaster RAI to reduce its holding in the Rai Way towers unit below 51 per cent.

The move will open Italy up to significant consolidation in the tower sector, and could lead to merger talks between Rai Way and El Towers, Reuters reports.

Such a merger would create a business worth more than €2 billion(US$2.2billion), with El Towers previously launching a takeover bid for Rai Way in 2015. That bid however was struck down by the government of Matteo Renzi, citing a 2014 provision that ensured at least 51 per cent of Rai Way must remain in public ownership.

The change in government – along with El Towers previous ownership by Silvio Berlusconi – has seen a public softening towards divesting Rai Way. The Berlusconi family still owns a 40 per cent stake in El Towers via MediaForEurope (MFE), but it is 60 per cent controlled by Italy’s largest independent infrastructure fund manager F2i.

Rai Way meanwhile is 65 per cent owned by RAI, which has a market cap of approximately €1.3 billion.

It is believed that the Italian government thinks that governance agreements between RAI and the shareholders of a prospective merger partner would ensure Italian interests in the sector.

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