May 23, 2014 / 2:40 PM / 3 years ago

UPDATE 1-Generali looks to quit Telecom Italia investment group in June

(Adds comments from Intesa, source)

MILAN, May 23 (Reuters) - Italian insurer Generali is looking to leave the investment grouping through which it jointly controls Italy's biggest phone group Telecom Italia as early as June, its chairman said on Friday.

Generali formed the Telco group in 2007 with Spanish telecom group Telefonica and Italian banks Intesa Sanpaolo and Mediobanca in order to agree on candidates for the board of Telecom Italia.

Telco is the biggest investor in Telecom Italia with a 22.4 percent holding. Telefonica has a stake of 66 percent in Telco and Generali has 19.32, while Intesa and Mediobanca hold 7.34 percent each.

Under the terms of the Telco agreement, which ends in February 2015, investors that want to leave the pact must notify the others during set time windows. The first opportunity to do so is in June.

"I think we will use (that opportunity)," Generali Chairman Gabriele Galateri di Genola said on Friday, when asked whether the company would exit Telco in June.

Quitting Telco would free a member from obligations regarding their Telecom Italia stakes, allowing them to sell their shares on the market or to another investor. The process of unwinding a member's interests from Telco could take up to six months.

Separately on Friday, Intesa Chief Executive Carlo Messina declined to comment on the timing of his bank's exit from Telecom Italia, saying the issue was "price sensitive", but confirmed plans to sell its stake in the company by 2017.

Mediobanca has also signalled several times it plans to sell its stake. Telefonica has the option to buy the stakes of its Telco partners but such a move is unlikely to happen until the group has complied with antitrust demands to downsize its presence in Brazil. Telefonica and Telecom Italia are direct competitors in the Latin American country.

The Italian shareholders could also, in theory, sell to a Telefonica rival - such as Egyptian tycoon Naguib Sawiris, who has tied his possible investment in Telecom Italia to an exit of the Spanish group.

However, a source familiar with the situation said on Friday: "There is no will among Telco investors to go against Telefonica."

Telefonica indirectly owns almost 15 percent of Telecom Italia. (Reporting by Andrea Mandala, Claudia Cristoferi and Danilo Masoni; Editing by Pravin Char)

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