Amazon, not Tiber

5 April 2007 By Robert Cyran Follow @rob_cyran

America Movil and Telefonica are positioning themselves to make bids for Olimpia the shell vehicle that controls Telecom Italia. But the real prize isn t Italy s supersaturated and highlyregulated telephone market it is supremacy south of the equator.

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Telefonica and France Telecom are both considering bids for Olimpia, either by themselves or in partnership with Italian parties, according to a report in the Wall Street Journal. Olimpia is the shell company that owns 18% of Telecom Italia's stock and the right to appoint 80% of the Italian operators' board members.

AT&T, the US telecoms group, and Mexicobased America Movil have already entered into onemonth exclusive talks to buy Olimpia. They have proposed buying onethird each of Olimpia for about E1.3bn. The deal would also give the remaining holders of Olimpia the right to sell out in a year's time at the same price.

The proposed deal is subject to Mediobanca and Generali, which are direct investors in TI, not exercising their right of first refusal over the Olimpia shares.

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