Seat of ambition

11 June 2003

At 9 times estimated 2003 ebitda, private equity buyers have paid a full price for the Italian unit. Another element of Marco Tronchetti Provera s daring plan for Telecom Italia has fallen into place courtesy of rising markets.

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Telecom Italia has agreed to sell its majority stake in Seat Pagine Gialle's directories unit in what is reportedly Europe's biggest ever privateequity buyout.

The deal values the directories unit at E5.65bn or roughly 9 times its estimated ebitda for 2003. The privateequity buyers, led by Britain's BC Partners, are paying E3.03bn for TI's 61.5% stake in the directories business and assuming E708m of Seat debt, according to newswire reports.

The transaction will reduce TI's net debt by E3.74bn. TI chairman Marco Tronchetti Provera pledged to raise E4.5bn from asset sales when he unveiled a daring debtfinanced deal to merge TI with its parent Olivetti.

As part of that deal, Tronchetti is about to set in motion a twostage share buyback worth E9bn. The first step, involving the repurchase of Olivetti shares, will start later this week. The second, involving TI shares, will follow later this month.

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