Romney Persona Non Grata in Italy: Bain’s Old Telephone Directory Deal

Photograph by Riccardo De Luca/Bloomberg

Phone booths in Rome.

If Mitt Romney’s tour of Europe skipped Italy, there was good reason.

Bain Capital, when Romney was chief executive, made about $1 billion in a leveraged buyout there.

The deal done 12 years ago remains controversial in Italy to this day, as Bloomberg’s Jesse Drucker, Elisa Martinuzzi and Lorenzo Totaro report today.

Bain was part of a group that bought a telephone-directory company from the Italian government and then sold it about two years later, at the peak of the technology bubble, for about 25 times what it paid.

Bain funneled profits through subsidiaries in Luxembourg, a common corporate strategy for avoiding income taxes in other European countries, according to documents reviewed by Bloomberg News. The buyer, Italy’s biggest telephone company, now has a total market value less than what it paid Bain and other investors for the directory business.

In Italy, the deals have spurred at least three books, separate legal and regulatory probes and newspaper columns alleging investors made a fortune at the expense of Italian taxpayers. Boston-based Bain wasn’t a subject of the inquiries, which didn’t result in any charges.

For more, see the fully story on Bain in Italy.

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