(Bloomberg) -- Telecom Italia SpA is working on a buyout of its media business that would end more than a decade of the division’s status as a publicly traded company, according to two people familiar with the matter.
A full takeover of Telecom Italia Media SpA, which is about 78 percent owned by Milan-based Telecom Italia, will be discussed at the companies’ board meetings on Thursday, said the people, asking not to be identified because the deliberations are confidential. The proposed buyout is friendly and minority investors will be offered Telecom Italia shares, said one of the people.
Telecom Italia plans to fully integrate Telecom Italia Media to simplify its corporate structure and help reduce expenses, said the people.
Telecom Italia Media shares were suspended by the Italian Exchange before the market opening pending a statement, the bourse said in a statement. The stock rose
1.9 percent on Wednesday to 1.05 euros, while Telecom Italia closed little changed at 1.037 euros. A Telecom Italia representative declined to comment on the buyout offer, as did Telecom Italia Media Chairman Severino Salvemini when reached by Bloomberg News.

Media Assets

Telecom Italia Media was created in 2003 as a vehicle for the phone company’s media and Internet assets. Telecom Italia Media owns a controlling stake in broadcaster Persidera. Two years ago, it sold the La7 TV unit for 1 million euros. Since its peak in 2005, Telecom Italia Media’s stock has slumped more than 90 percent, giving the Rome-based company a market value of about 110 million euros ($125 million).
Telecom Italia directors on Thursday will also discuss a new business plan, which will be unveiled along with the company’s 2014 earnings during a press event in London the following day.
Chief Executive Officer Marco Patuano is seeking to cut Telecom Italia’s net debt, which stood at 26.6 billion euros at the end of September, and restore the company’s investment-grade rating. Other announcements the carrier has planned this week include an acceleration of investments to boost its fiber-optic network in Italy and to improve wireless coverage in Brazil.