Swissom has offered to buy out its remaining fellow shareholders in Fastweb, giving the Swiss telecommunications group full control of its troubled Italian subsidiary. The Swiss group will offer Fastweb shareholders E18 a share – 34 per cent, over this weeks prior average price. The all-cash deal will cost the highly profitable Swiss group E256m. Fastweb’s shares shot up almost 35 per cent in early trading in Milan on Wednesday.
Swisscom had previously said it had no plans to acquire the outstanding 18 per cent of Fastweb’s equity but the company justified the move on the grounds that full ownership would provide “greater strategic and operational flexibility.”
Since Swisscom’s initial takeover in May 2007, Fastweb has delivered robust growth. In 2009, the company had sales of E1.85bn and operating profits of E138m. At the end of June, Fastweb reported it had almost 1.7m broadband customers.
Fastweb this year become embroiled in a complex legal dispute over allegations of unpaid value added taxes. The company is under investigation for allegedly evading value added tax as part of a money-laundering ring. It made a provision of E70m in 2009 as a result.