Olivetti odds-on for Telecom Italia win

THE ODDS are shortening on Olivetti this week pulling off its audacious $60bn bid for Telecom Italia - albeit by the narrowest of margins - after rival bidder Deutsche Telekom ruled out any improvement in the terms of its offer at the weekend.

Although no formal statement has been made by the Italian government as to where it stands in the bid, in view of the Germans' failure to back down over Italian demands for a larger share in the merged group, the prospect of the Deutsche Telekom bid receiving the support of the Rome government is now "virtually nil".

The Italian government holds a golden share in Telecom Italia and has strong reservations about the fact that Deutsche Telekom is 72 per cent state owned.

Advisors to Olivetti, whose 11.5 euros-a-share offer for the Italian telecoms leviathan closes on Friday, said yesterday: "Nobody here is hoisting the victory flag. But before the talk in Italy was that we had a 50:50 chance of pulling it of. That is now a shade over 50:50. The Deutsche Telekom bid has run into the sand."

There are preliminary indications that Telecom Italia's core shareholders - a group of Italian institutions meant to be supportive of management, whose influence goes much further than their combined 7 per cent shareholding suggests - were preparing to tender their shares for the Olivetti bid.

Telecom Italia said at the weekend that the terms of the Deutsche Telekom merger "are and remain those of April 22 last," quashing investor hopes of a last-minute sweetening of the Telekom bid terms.

A collapse of the Deutsche Telekom bid would be a crushing blow for Ron Sommer, the charismatic chairman of the German telecoms company whose stewardship is now likely to be increasingly called into question. If the bid fails he is likely to turn his attention to One2One, the UK mobile phone company being sold by Cable & Wireless. But even here, given the level of interest already shown by competitors, he is unlikely to get anything like a clear run.

So far Olivetti has received barely 1 per cent acceptances for its offer. However, neither camp expects any firm indication of which way the battle is going before Wednesday. Many large institutions will almost certainly wait until the last minute before deciding which way to jump.

As tension mounted the battle was become increasingly ill-tempered, with Deutsche Telekom's bid threatening to become ensnared in a plethora of legal actions and Telecom Italia talking of invoking technicalities to frustrate Olivetti.

Olivetti's advisers believe it is highly significant that Enel, which is 100 per cent Italian state owned, has been allowed to join France Telecom in suing Deutsche Telekom over Wind, their Italian telecoms joint venture.

Franco Bernabe, the head of Telecom Italia, said yesterday he did not expect Olivetti would get more than 50 per cent of the shares. Olivetti has said it needs 67 per cent of Telecom Italia shares in order to merge with Telecom Italia, but if it gets less than 35 per cent it will walk away.

Start your day with The Independent, sign up for daily news emails
News
ebookA unique anthology of reporting and analysis of a crucial period of history
Latest stories from i100
Have you tried new the Independent Digital Edition apps?
Independent Dating
and  

By clicking 'Search' you
are agreeing to our
Terms of Use.

iJobs Job Widget
iJobs Money & Business

Guru Careers: Software Developer / C# Developer

£40-50K: Guru Careers: We are seeking an experienced Software / C# Developer w...

Neil Pavier: Management Accountant

£45,000 - £55,000: Neil Pavier: Are you looking for your next opportunity for ...

Sheridan Maine: Commercial Accountant

£45,000 - £55,000: Sheridan Maine: Are you a newly qualified ACA/ACCA/ACMA qua...

Laura Norton: Project Accountant

£50,000 - £60,000: Laura Norton: Are you looking for an opportunity within a w...

Day In a Page

Abuse - and the hell that came afterwards

Abuse - and the hell that follows

James Rhodes on the extraordinary legal battle to publish his memoir
Why we need a 'tranquility map' of England, according to campaigners

It's oh so quiet!

The case for a 'tranquility map' of England
'Timeless fashion': It may be a paradox, but the industry loves it

'Timeless fashion'

It may be a paradox, but the industry loves it
If the West needs a bridge to the 'moderates' inside Isis, maybe we could have done with Osama bin Laden staying alive after all

Could have done with Osama bin Laden staying alive?

Robert Fisk on the Fountainheads of World Evil in 2011 - and 2015
New exhibition celebrates the evolution of swimwear

Evolution of swimwear

From bathing dresses in the twenties to modern bikinis
Sun, sex and an anthropological study: One British academic's summer of hell in Magaluf

Sun, sex and an anthropological study

One academic’s summer of hell in Magaluf
From Shakespeare to Rising Damp... to Vicious

Frances de la Tour's 50-year triumph

'Rising Damp' brought De la Tour such recognition that she could be forgiven if she'd never been able to move on. But at 70, she continues to flourish - and to beguile
'That Whitsun, I was late getting away...'

Ian McMillan on the Whitsun Weddings

This weekend is Whitsun, and while the festival may no longer resonate, Larkin's best-loved poem, lives on - along with the train journey at the heart of it
Kathryn Williams explores the works and influences of Sylvia Plath in a new light

Songs from the bell jar

Kathryn Williams explores the works and influences of Sylvia Plath
How one man's day in high heels showed him that Cannes must change its 'no flats' policy

One man's day in high heels

...showed him that Cannes must change its 'flats' policy
Is a quiet crusade to reform executive pay bearing fruit?

Is a quiet crusade to reform executive pay bearing fruit?

Dominic Rossi of Fidelity says his pressure on business to control rewards is working. But why aren’t other fund managers helping?
The King David Hotel gives precious work to Palestinians - unless peace talks are on

King David Hotel: Palestinians not included

The King David is special to Jerusalem. Nick Kochan checked in and discovered it has some special arrangements, too
More people moving from Australia to New Zealand than in the other direction for first time in 24 years

End of the Aussie brain drain

More people moving from Australia to New Zealand than in the other direction for first time in 24 years
Meditation is touted as a cure for mental instability but can it actually be bad for you?

Can meditation be bad for you?

Researching a mass murder, Dr Miguel Farias discovered that, far from bringing inner peace, meditation can leave devotees in pieces
Eurovision 2015: Australians will be cheering on their first-ever entrant this Saturday

Australia's first-ever Eurovision entrant

Australia, a nation of kitsch-worshippers, has always loved the Eurovision Song Contest. Maggie Alderson says it'll fit in fine