Exclusive-INWIT investors line up financing for possible take-private, sources say

INWIT Investors Prepare Financing Amid Take-Private and Customer Dispute

Main Developments in INWIT Take-Private Bid

By Elvira Pollina, Amy-Jo Crowley and Valentina Za

Shareholder Actions and Financing Arrangements

MILAN/LONDON, Oct 12 (Reuters) - The leading shareholders in INWIT are arranging the financing for a potential take-private deal of Italy's largest mobile telecom towers company, two people close to the matter said, amid a contractual dispute between the masts firm and its two main customers.

French private equity firm Ardian and investment vehicle Oak Holdings 1, the latter backed by co-investors GIP, Vodafone and KKR, are exploring a bid to buy out minority shareholders in INWIT, the people said. 

Ardian controls 32% of INWIT, while Oak Holdings controls 39%.

Bank Involvement and Potential New Stakeholders

The investors are discussing the financing of the bid with banks, the people said, with one person adding that Abu Dhabi investment firm Mubadala is expected to take a stake in INWIT as part of the plan.

The people cautioned that deliberations are still ongoing.

Official Responses and Market Reactions

Ardian, GIP, Vodafone, KKR and Mubadala declined to comment. GIP is part of US investment firm Blackrock. 

A spokesperson said the company did not have any information on the matter. 

Shares in INWIT were up around 1% at 1000 GMT, paring gains after rising as much as 5% following the report.

INWIT's market value had fallen about 27% over the past year to $7.1 billion (€6.3 billion) as of Friday's close, according to LSEG data.

Dispute With Customers and Impact on Take-Private Scenario

DISPUTE WITH CUSTOMERS

INWIT, which listed in Milan in 2015, has been the subject of takeover speculation since a French media report in February that infrastructure fund Ardian and investment group Brookfield were interested in taking the Italian company private.

INWIT has since then become embroiled in a dispute with its two main customers, Telecom Italia (TIM) and Swisscom's Fastweb, both of which have initiated procedures to terminate their respective contracts with INWIT as part of efforts to renegotiate them on more favourable terms.

Analyst Perspectives on the Deal

Brokerage Equita said it considered the takeover scenario "credible" but was cautious.  

"In our view, a potential take-private transaction would require the funds to have strong conviction in the outcome of the negotiations and the resilience of the MSA (master service agreement with TIM and Fastweb)," Equita said in a note. 

Barclays said the ownership shift resulting from the potential transaction could bring greater flexibility to address the ongoing customer-related challenges.

Additional Information

(1 euro = $1.1201)

(Reporting by Elvira Pollina and Valentina Za in Milan, and Amy-Jo Crowley in London; Additional reporting by Federico Maccioni in Abu Dhabi and Mirko Miorelli in Gdansk; Editing by Anousha Sakoui, David Holmes and Susan Fenton)