Tronchetti's two fingers

2 April 2007 By Hugo Dixon

One is for AT&T; the other Carlos Slim. Selling control of Italy’s telecoms champion to foreigners will drive the Italian government wild. There’s no love lost between Tronchetti and Prodi. It will be interesting to see if the Italy tries to block the deal, as it has others.

This content is for Subscribers only

Context News

Pirelli said it was in exclusive talks with AT&T, the US telecoms group, and Mexicobased America Movil over the sale of some of its 80% stake in Olimpia, the shell company through which it exercises quasicontrol of Telecom Italia via an 18% stake.

Under the deal, AT&T and American Movil would buy onethird each of Olimpia at a price based on a TI share price of E2.82, a 32% premium to Friday's close. The other third would be held by Pirelli and the Benetton family, which owns 20% of Olimpia. It has not been decided how exactly the remaining onethird stake would be split between Pirelli and the Benettons. There would be no shareholders agreement between Pirelli/Benetton, AT&T and America Movil.

The deal would also give Pirelli and the Benettons the right to sell out of Olimpia in a year's time at the same price. The option would extend to the 1.4% of TI shares which Pirelli holds outside Olimpia, and the 0.2% held by the Benettons.

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.

The immediate market reaction was to send TI shares 9.2% higher to E2.33.

Context News

Email a friend

Please complete the form below.

Required fields *