Italy's Rai Way, EI Towers shareholders extend talks over TV towers tie-up
Merger Negotiations Between Rai Way and EI Towers
By Elvira Pollina and Giuseppe Fonte
Background of the Merger Talks
MILAN/ROME, June 16 (Reuters) - Shareholders in Italian broadcasting tower operators Rai Way <RWAY.MI> and EI Towers have agreed to extend talks on a potential merger after failing to reach a deal by Monday's deadline.
A tie-up between Milan-listed Rai Way, controlled by public broadcaster RAI, and rival EI Towers would create a national tower broadcasting champion.
Ownership Structure
EI Towers is 60% owned by Italian infrastructure fund F2i, with the rest held by Italy's largest commercial broadcaster MFE-MediaForEurope, controlled by the family of late former Prime Minister Silvio Berlusconi.
Key Issues in Negotiations
Two sources close to the matter said the parties had been trying to narrow significant gaps on key issues ahead of the deadline.
Contract Extension Requests
These include a request by RAI, which owns 65% of Rai Way, for a 15-year extension beyond 2037 of EI Towers' contract with MFE, one of the sources said.
MFE has already agreed to extend the contract by five years to 2037, according to the people.
Proposed Shareholding Structure
Under the proposal being discussed, RAI would retain a 51% stake in the combined group, while MFE would hold a portion of the shares without voting rights, the people added.
Shares in Rai Way rose by around 1% after RAI, F2i and MFE announced the extension of the talks.
Historical Context and Regulatory Framework
The negotiations stem from a memorandum of understanding signed in December 2024 by Treasury-owned RAI, F2i and MFE, and have already been extended after missing earlier end-March and end-September deadlines.
In 2024, Rome approved a decree requiring any cut in RAI's stake to occur through combinations with entities in the same sector, confirming an existing obligation for RAI to retain at least a 30% holding in its listed tower business.
Efforts to merge Rai Way and EI Towers date back more than a decade, but valuation disputes and political wrangling have repeatedly derailed a deal.
Current Demands and Next Steps
For its part, on Monday MFE asked for a review of the criteria used to define the share swap ratio, arguing that the current approach could penalise EI Towers as it does not fully reflect some items included in its business plan, one of the people said.
It has also requested that the duration of existing contractual agreements between Rai and Rai Way be aligned to 2037, the source added.
($1 = 0.8632 euros)
(Reporting by Elvira Pollina, Giuseppe Fonte and Cristina Carlevaro. Editing by Giulia Segreti, Mark Potter and Keith Weir)
