Bernabe's return

26 November 2007 By Hugo Dixon Follow @hugodixon

In the eight years since Bernabe was kicked out of Telecom Italia after Olivetti s hostile partial takeover, the stock has fallen 60%. TI needs to be run in the interests of all shareholders not just one faction. Bernabe has the track record to make this happen.

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Franco Bernabe may be reappointed as chief executive of Telecom Italia this week, ending a long impasse over who will run the Italian telecoms giant, according to people familiar with the situation. Bernabe ran TI until he was removed in 1999 after the company's hostile takeover by Olivetti. Control then passed to Marco Tronchetti Provera, the Pirelli boss.

Since Tronchetti stood down last year, the management of TI has been in a state of flux. The sale of Pirelli's important minority stake to Spain's Telefonica earlier this year failed to resolve the matter as several important Italian groups – notably Mediobanca, Intesa SanPaolo, Generali and the Benetton family – have the right to suggest who will manage TI.

The Italian shareholders have spent several months arguing over who would run TI. Mediobanca's own shareholders and managers have also been divided over who to appoint.

The various parties, however, now seem prepared to accept Bernabe as chief executive. As part of the same package, Gabriele Galateri, a former Mediobanca chairman, would be appointed as TI's chairman.

Context News

The Italian shareholders have spent several months arguing over who would run TI. Mediobanca's own shareholders and managers have also been divided over who to appoint.

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