T.Italia shares up after report on Telefonica merger

MILAN Feb 2 (Reuters) - Shares in Italian phone company Telecom Italia (TLIT.MI) rose to a 10-week high in early deals on Tuesday after a report said the Italian government was ready to give its go-ahead to a takeover from Telefonica (TEF.MC).

By 0807 GMT, Telecom Italia shares were up around 4 percent at 1.125 euros, having earlier reached their highest level since November 19.

In an unsourced report, la Repubblica said the government was ready to give its go-ahead to an all-share offer from Telefonica on condition the network remains in Italian hands and that Italian shareholders are involved in the governance of the combined entity.

The newspaper said Telefonica intended to present an offer rather shortly.

Telecom Italia declined to comment.