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Deals

Telecom Italia's chairman says a merger with Orange is fantasy

MILAN (Reuters) - A potential merger between Italy's Telecom Italia TLIT.MI and French peer Orange ORAN.PA is a "fantasy by the press", Telecom Italia's chairman, Giuseppe Recchi, said on Friday.

Telecom Italia chairman Giuseppe Recchi gestures during the launch of the new logo of its TIM brand in Rome, Italy, January 13, 2016. REUTERS/Remo Casilli

Recchi also said that Orange ORAN.PA Chief Executive Officer Stephane Richard should "take responsibility" for repeatedly talking about a possible tie-up "that is only in his head and ... is causing effects on the media and on the market".

Shares in Telecom Italia have risen strongly in the last few days on speculation the Italian phone company could be a potential takeover target in a consolidating industry.

“Nobody has ever talked about it,” Recchi explained, adding that a merger is “pure fantasy”.

A cross-border deal such as the one hypothesized between the two telecom companies, would not create any value, according to Recchi.

He also said that an alliance with Italian broadcaster Mediaset MS.MI is not on the table.

Earlier this week Richard had said that he would look into a deal with Telecom Italia if invited by French billionaire Vincent Bollore, chairman of media group Vivendi VIV.PA , which owns a 23.8 percent stake in Telecom Italia.

“If one day Mr. Bollore tells me that the best thing would be.... to make Orange buy Telecom Italia, then we’ll see,” Richard said on the sidelines of an event in Cairo late on Monday, though dismissing the chances of this happening.

Vivendi won four seats in the 17-member board of the Italian telecoms company in the last shareholders’ meeting in December, with its new board representatives including Chief Executive Arnaud de Puyfontaine.

However, De Puyfontaine ruled out that Vivendi’s investment in Telecom Italia would be a point of entry for Orange.

Reporting by Stefano Rebaudo; writing by Giulia Segreti and Francesca Landini; Editing by Elaine Hardcastle

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