Telecom Italia directors to consider Hutchison proposal-sources
MILAN (Reuters) - Telecom Italia (TLIT.MI) has asked Chairman Franco Bernabe and four board members to assess proposals for a merger with Hutchison Whampoa's (0013.HK) local mobile phone unit 3 Italia, three sources familiar with the situation said on Thursday.
Earlier this week sources with knowledge of the situation had said Hong Kong-based Hutchison was interested in taking a near 30 percent stake in Italy's biggest telecoms operator under a plan to sell 3 Italia to its rival.
Meanwhile Bernabe is under pressure to find a strategic solution that improves returns at his debt-laden group, now struggling against falling margins in crisis-hit Italy.
"The company has decided to create a committee to assess if the conditions are there to start negotiating with the counter-party," a source with direct knowledge of the situation said after a Telecom Italia board meeting on Thursday.
"This is not the beginning of a formal negotiation," the source added.
Two of the sources said the committee will be made up of board members Gabriele Galateri di Genola, Elio Catania and Julio Linares - representing controlling shareholder Telco - along with independent director Luigi Zingales and Bernabe.
The sources earlier this week said Hutchison was considering buying a 12-percent stake indirectly held by three Italian investors and merge 3 Italia with Telecom Italia's mobile business in exchange for shares in the enlarged group.
Hutchison may also buy additional shares on the market to reach its target.
Telco, which owns 22.4 percent of Telecom Italia, is 46.2-percent owned by Spain's Telefonica (TEF.MI), which competes against Telecom Italian in Brazil. Insurer Generali (GASI.MI) owns 30.6 percent of Telco and banks Intesa Sanpaolo (ISP.MI) and Mediobanca (MDBI.MI) own 11.6 percent each.
The Italian government has a golden share in the former state monopoly, giving it the right to veto some board decisions.
Telecom Italia declined to comment while no one was immediately available to comment at Telco and Hutchison.
Shares in Telecom Italia last traded up 2 percent at 0.6125 euros.
- Obama makes rare campaign trail appearance, people leave early
- Obama makes rare campaign trail appearance, some leave early
- Turkey to let Iraqi Kurds reinforce Kobani as U.S. drops arms to defenders |
- Nigeria declared Ebola-free, holds lessons for others |
- Former 'American Idol' contestant Joanne Borgella dies at 32