The European arms of BNP Paribas, Barclays Bank, Credit Suisse First Boston and The Royal Bank of Scotland are set to lead a bank deal backing what could be the largest European takeover by private equity firms. BC Partners, CVC Partners and Investitori Associati are buying 62% of the directories business from Italy's biggest phone company, Telecom Italia SpA, for E3 billion, which is equivalent to $3.5 billion. If the buyers are able to buy the rest of the unit owned by other investors, the purchase price could rise to E5.7 billion. The sale of the yellow pages business, called Seat Pagine Gialle, will help shed some of Telecom Italia's E40 billion debt load.
The transaction is set to close next September and the lead banks are said to be arranging a bank deal of between E3-4 billion that will back the transaction, along with equity from the firms. There is also an expected E1.2 billion high-yield bond component. Total leverage on the transaction is expected to be in excess of six times. Officials at RBS and Barclays could not be reached, while CSFB and BNP officials declined to comment. Officials at the private equity firms either did not return calls or could not be reached by press time.