Telecom Italia demands halt to Olivetti bid after `ambush'

THE BID battle for control of Telecom Italia reached fresh heights last night as the target company formally asked the Milan stock exchange authorities to stop Olivetti's hostile pounds 40bn offer, claiming flagrant breaches of takeover rules.

With less than 24 hours to go before the offer closes, Beradino Libonatti wrote to Consob, demanding that the bid be halted because of "unauthorised and illegal" attempts to influence the way shareholders vote.

Franco Bernabe, the chief executive of Telecom Italia, added that it had been "ambushed" by people with no respect for authority or the regulations, using tactics which in other countries would render the offer invalid.

Telecom Italia's complaints centre around claims fed into the market from "people familiar with Olivetti" on the level of shareholder acceptances. These reports claim support is running at 42 per cent, well above the 35 per cent needed for Olivetti to claim control, when the official acceptance level as of Wednesday night was 9.03 per cent.

Telecom Italia also said it was seeking injunctions against the unknown parties responsible for spreading the claims.

The Olivetti camp hit back last night with counter claims that the true level of support for its cash and shares bid was being understated because nominee banks supporting Telecom Italia were sitting on shares which had been voted in favour of the bid.

Even if Olivetti achieves 35 per cent backing,Telecom Italia insists that, under its articles of association, Olivetti would only be able to vote 3 per cent of those shares in favour of the deal while holders of savings shares - preference shares - in Telecom Italia might launch a legal challenge.