UPDATE 2-Telecom Italia boss likely to win mandate for talks -sources

Wed Apr 10, 2013 4:51pm EDT

* Chairman Bernabe to present deal at Thurs board meeting

* Hutchison Whampoa said to be targeting 29.9 pct

* Hutchison would swap 3 Italia for Telecom shares (Recasts with chairman likely to win mandate for talks with Hutchison)

By Danilo Masoni and Lisa Jucca

MILAN, April 10 (Reuters) - Telecom Italia SpA Chairman Franco Bernabe is likely to win a green light from the board to deepen talks with a Hong Kong-based conglomerate said to be targeting 29.9 percent of the Italian group, sources familiar with the situation said.

Bernabe, at the helm of Telecom Italia since Spanish rival Telefonica and three Italian investors took control in 2007, is under pressure from shareholders to deliver a strategy that can lift the company's shares from near-record lows.

The executive will illustrate to a Telecom Italia board meeting on Thursday a proposal by Hong Kong-based Hutchison Whampoa to buy out three Italian investors in Telecom Italia's parent company, called Telco, and swap its mobile business 3 Italia for shares in Telecom Italia.

The prospective deal would reduce the number of mobile players in Italy to three from four.

"If the proposal is a serious one, it's obvious that it needs to be examined," a senior source familiar with the thinking of Telco shareholders told Reuters.

"If Hutchison has a credible plan and is ready to pay, it would be irresponsible not to look at the bid proposal," a second source told Reuters.

Yet, the sources stressed that shareholders had yet to make up their mind on the plan and that any formal decision, which they wanted to be based on a sound industrial plan and equal treatment of all shareholders, may take months.

Last year, Telco shareholders had turned down an offer by Egyptian tycoon Naguib Sawiris to inject 3 billion euros of cash into the debt-laden Italian telecoms company.

The possible deal with Hutchison could also run into political opposition if it involved loosening control over Italy's landline network, an asset of national strategic interest over which the treasury has veto power.

NO DETAILS YET

Telco, which owns 22.4 percent in Telecom Italia and controls the board, said in a statement late on Tuesday it had had no contacts with Hutchison over a possible deal and was not aware of the details.

"There have been no contacts of any nature, not even on an informal basis, with the Hutchison Whampoa group nor with Telecom Italia and no documents exchange occurred on the matter," Telco said.

Telecom Italia had no immediate comment. No-one at Hutchison Whampoa could immediately be reached for comment. Telco shareholders were not immediately available for comment.

Telco is 46.2-percent owned by Telefonica. Insurer Generali owns 30.6 percent and banks IntesaSanpaolo and Mediobanca own 11.6 percent each.

Italian investor Marco Fossati, who owns 5 percent in Telecom Italia also said on Wednesday he had had no contacts with Hutchison but was sceptical about some of the valuations quoted in the media.

According to sources familiar with the talks, Hutchison may offer to buy out Italian investors in Telecom Italia at a price close to book value of 1.2 euros a share. Analysts value 3 Italia at between 1.5 billion euros and 2 billion.

"I am not saying that the idea should not be considered, on the contrary it is necessary for Telecom Italia to look at it," Fossati told Italian daily Il Sole 24 Ore. "But first of all there must be an economic and industrial convenience for the company. Then, if the price is right, why not?", he said. ($1 = 0.7658 euros) (Additional reporting by Antonella Ciancio in Milan and Denny Thomas in Hong Kong; Editing by David Holmes)