Telecom Italia shares drop as investors seen split on Hutchison

MILAN Wed May 8, 2013 3:30am EDT

MILAN May 8 (Reuters) - Shares in Telecom Italia dropped more than 3 percent on Wednesday on the back of concerns the board will likely put off a decision on whether to open formal merger talks with Hutchison Whampoa.

Key shareholders are divided on the issue and a panel of directors set up last month will not be able to recommend seeking a tie-up when the board meets on Wednesday to approve first-quarter results, sources with knowledge of the situation said on Tuesday.

"It is unlikely that from today's board binding decisions on the dossiers emerge," ICPBI Equity Research said in a note.

The stock fell 2 percent to 0.63 euros by 0729 GMT. (Reporting by Antonella Ciancio, editing by Silvia Aloisi)