Italian electricity utility ENEL SpA is close to signing a deal with Vodafone PLC of the U.K. for the purchase of the Italian fixed line telecommunications operator Infostrada SpA, industry sources and published reports said today.
"The talks are very advanced. The difficult part has been accomplished," an industry source said, speaking on condition of anonymity. An ENEL spokeswoman declined to comment on the reports.
The ENEL board is due to meet tomorrow to consider the agreement, the ANSA news agency reported. ENEL and Vodafone are currently revising the final text of the agreement, which provides for ENEL to buy 100 percent of Infostrada on its own, without the participation of France Télécom SA, its partner in Wind Telecomunicazioni SpA, ANSA said. France Télécom will take a stake at a later stage, the agency reported.
ENEL shares declined 2.4 percent on the Milan stock market on the news that a deal was imminent. Investors fear that ENEL may have agreed to pay an excessively high price for Infostrada, stock market analysts said.
Rumors of the deal drew swift political criticism. "It's scandalous that ENEL uses money from the electricity tariffs to nationalize private sectors of the economy," Giuseppe Pisanu, leader of the opposition Forza Italia party in the Chamber of Deputies (lower house of parliament), said in a radio interview.
The ideal solution is for the government to accelerate the privatization of ENEL, the chairman of the cash-rich utility, Chicco Testa, told reporters.
ENEL can be contacted in Rome on +39-06-8509-7652 or on the Web at http://www.enel.it.