Spanish telecoms giant Telefonica has agreed to raise its stake in Telecom Italia (TI), a source close to the deal has revealed to Reuters, effectively ending months of speculation over the future of the debt-laden Italian group. Under the terms of the deal, which are expected to be made public later today, Telefonica will boost its stake in Telco, the holding company that controls TI, from 46% to 65%, with an option to increase the stake to around 70% in the future. The deal, which values each TI share at ‘just above’ EUR1 (USD1.35), nearly double the current market price, will see Telefonica’s indirect stake in TI increase to approximately 16%. Further, the agreement is thought to involve a ‘debt and equity’ component, the source said, without elaborating.
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