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Italian government politicians on Monday expressed hope other bidders would emerge for a controlling stake in Telecom Italia, underlining how difficult it could be for AT&T of the US and América Móvil of Mexico to conclude their negotiations.

AT&T and América Móvil announced on Sunday they were in exclusive talks with Pirelli to buy a majority of the Italian tyre group’s 18 per cent shareholding in Telecom Italia.

But they will have to contend with stiff political and union opposition in spite of the comment only last week by Romano Prodi, Italian prime minister, there was “no bar on foreign investment in Italy in the telecoms sector”.

Paolo Gentiloni, communications minister, expressed profound worries about the potential deal on Sunday night.

He added on Monday the government hoped Italy’s homegrown industrial and financial companies knew how to “react to this challenge”. “It is up to our system to find the resources to react and I hope to stop Telecom Italia from ending up outside our system,” he said.

Antonio Di Pietro, infrastructure minister who played an important part in causing Abertis of Spain and Autostrade of Italy to call off their planned merger, said he was worried as a “citizen and as a member of the government” an important asset of the country was being dealt with in a financial operation like a “kilo of apples or pears”.

Other government officials played down the chances of political interference, however, although Mr Prodi’s coalition is often plagued by factions in disagreement.

AT&T and América Móvil stressed they will be sharing control with Pirelli of Olimpia,
the holding company through which the tyre group owns 18 per cent of Telecom Italia and nominates most of the directors. But the two bidders could get the right to buy out Pirelli in a year’s time.

Investors shrugged off the uncertainty, preferring to react to the 32 per cent premium to Friday’s share price which AT&T and América Móvil are prepared to pay. Telecom Italia’s shares were up 10.3 per cent at €2.36 in late afternoon trading in Milan.

Copyright The Financial Times Limited 2018. All rights reserved.

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