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April 10, 2007 9:27 pm
Telecom Italia fired a broadside at Pirelli, the telecoms company’s controlling shareholder, saying on Tuesday night that it had hired financial advisors to weigh proposed significant changes in the company’s ownership structure.
Italy’s dominant telecoms group has appeared at times on the sidelines while its future has been discussed by Pirelli, the tyre group which controls its board, Italian banks, Italian politicians and other potential suitors including AT&T and America Movil of Mexico.
The tyre company last week effectively sacked Guido Rossi, TI’s chairman, in a dispute over strategy and the telecoms group is now awaiting election of a new board of directors next week. But on Tuesday night TI said it was evaluating “the various strategic options”, implying it wanted a stronger say in who its new owners would be.
TI said it had hired Merrill Lynch and Societe Generale to evaluate options “in the interests of the company and all its shareholders”. The wording highlighted concern at TI that Pirelli’s actions may not benefit all TI investors.
Mr Rossi and parts of Romano Prodi’s government have attacked the way in which Pirelli with a minority investment controls TI by being able to nominate most of the board. Pirelli and the Benetton family own just 18 per cent of TI’s ordinary shares through Olimpia, a holding company. Marco Tronchetti Provera, Pirelli’s chairman who was TI chairman until last September, controls the tyre group through a chain of other companies, none of which he fully owns.
Such “Chinese boxes” have been criticised as one of the deterrents to foreign investment in Italian companies.
Pirelli is in exclusive talks until the end of the month with AT&T and America Movil to sell two-thirds of its stake. Both potential bidders have emphasised they are not seeking to take over the company and they are open to Italian partners.
On Tuesday Intesa SanPaolo and Mediobanca, two Italian banks, both confirmed that they were in discussions with investors about other possible entrants into the shareholder structure.
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