CashNews.co
By Giuseppe Fonte
ROME (Reuters) – Italy will target domestic savers in its planned public offering of around 14% of Poste Italiane, a government decree seen by Reuters showed on Tuesday.
The Italian postal service is valued at around 16.2 billion at current market prices and the proposed share sale is therefore expected to cut Italy’s huge public debt by 2.3 billion euros ($2.6 billion).
Under the decree, which has yet to be published, the sale procedure will give “priority to savers resident in Italy, including Poste Italiane employees, encouraging their participation through incentives” such as stock price discounts.
When announcing the decree last week, Prime Minister Giorgia Meloni’s office said Italy’s Treasury would cut its shareholding while preserving more than 50% of Poste in state hands.
The Treasury owns a direct 29.3% stake, with another 35% held by state lender Cassa Depositi e Prestiti (CDP).
The placement, part of which would go to domestic and foreign professional investors, can be done in stages and the Treasury reserves the right to use an accelerated bookbuilding process or a block trade to get the highest price.
Italy’s Treasury has asked financial and legal advisers to pitch for a role in the sale, sources familiar with the matter said. But details of the timetable have not yet been finalised.
Under criticism from opposition parties and trade unions for selling part of a key public service, the government has already scaled down its plans. Meloni had initially planned to reduce the whole state stake to as low as 35%.
Critics say that debt interest savings stemming from any sale would be lower than the dividends paid by Poste over time.
The group – a major employer in Italy with more than 120,000 workers – plans to pay out 6.5 billion euros in dividends between 2024 and 2028, up from 3.8 billion euros over the previous five years.
To appease critics, the decree states that jobs will be safeguarded as well as Poste’s widespread presence, particularly in “mountain and island municipalities”.
The sale will also be carried out without jeopardizing the Polis project, under which Poste invested 1.2 billion euros of mostly public money to renovate 7,000 outlets across the country, aiming to help older people in small towns who are struggling to access public services online.
Italy is looking to disposals as a period of expansionary fiscal policy sparked by the COVID-19 pandemic is set to end next year, when the European Union will adopt stricter budget rules under the reform of its Stability and Growth Pact.
Since late 2023, Italy’s Treasury has raised around 3 billion euros by reducing its holdings in bailed-out bank Monte dei Paschi (MPS) and energy group Eni.
($1 = 0.8997 euros)
(Reporting by Giuseppe Fonte; Editing by Alexander Smith)