Hutchison ready for valuation challenge and float

September 26, 2005 - source: BWCS

As expected Hong Kong conglomerate Hutchison Whampoa is on track to sell off its Italian mobile company 3 Italy. According to reports on Reuters this morning, "sources close to the deal" have indicated that documents will be signed within days to authorize the sale.

The IPO is expected to be worth some euros 2.5 billion (US$3.04 billion) and will see Hutchison float a 25% stake on the Milan stock exchange. This will be the first share sale of a pure 3G operator and should, according to financial analysts, help set a benchmark for the way stock markets value such mobile multimedia companies. Certainly it will be vital in crystallizing the valuation of Hutchison's various 3G operators around the world.

Hutchison's Italian 3G unit, which first launched services only two years ago, was on target to achieve EBITDA breakeven on a monthly basis for the month of August, the company said last month. At the end of August 2005 the company had amassed some 4.52 million users. It reported that its average revenue per user was euros 35.78 with more than 25% of this coming from non-voice services.