Telecom Italia launches pounds 15bn cash buyout of mobile offshoot
Monday 29 March 1999
The move is part of Telecom Italia's defence against a 53bn euro hostile bid from Olivetti, the reformed electronics group that is one-sixth of its size.
If Telecom Italia shareholders approve the TIM buyout, the group could become too large for Olivetti to pursue.
Telecom Italia surprised observers with the bid, which values TIM shares at 6.84 euros each - an 18 per cent premium to Friday's closing price.
Telecom Italia is also planning to offer 3.85 euros for each TIM savings share, a premium of almost 9 per cent. The company already owns 60 per cent of TIM's share capital and 20 per cent of its savings shares.
Plans for the cash bid come after shareholders had criticised Franco Bernabe, Telecom Italia's managing director, for drawing up a plan to offer Telecom Italia shares in return for TIM shares. They argued that Telecom Italia should use its balance sheet strength to take on more debt.
Many mutual fund managers would also have been disadvantaged by the all-share offer, which would have lifted the value of their Telecom Italia shareholdings above the ceiling up to which a mutual fund is allowed to invest in a single stock.
However, sources close to Olivetti said the proposed buyout would still dilute Telecom Italia's earnings per share because the deal would incur a huge goodwill charge.
One observer said: "It's not a creation of value. It's a poison pill designed to help Bernabe keep his job."
Telecom Italia is likely to seek shareholder approval for the measures at a meeting provisionally scheduled for the end of April.
It needs approval from 30 per cent of its shareholders in order to press ahead with the move on the mobile phone arm.
- 1 2015 General Election: Green party will not appear in TV debate alongside Ukip – says BBC
- 2 Kentucky gang rape: 15-year-old boy left in critical condition after sexual attack by group at party
- 3 Of course, teenage girls need role models – but not like beauty vlogger Zoella
- 4 North Korean officials 'publicly executed for watching South Korean soap operas'
- 5 Muslims, immigration and teenage pregnancy: British people are ignorant about almost everything
'Nasa Confirms Six Days of Darkness in December': No, they don't - it's a hoax
Canadian actor punched in face after 'Islamophobia' experiment goes wrong in wake of Ottawa shooting
Elizabeth Norment dead: House of Cards actress honoured by Kevin Spacey after she dies aged 61
Kentucky gang rape: 15-year-old boy left in critical condition after sexual attack by group at party
North Korean officials 'publicly executed for watching South Korean soap operas'
Pope Francis declares evolution and Big Bang theory are real and God is not 'a magician with a magic wand'
Huge surge in Ukip support after EU funding row, according to new poll
Ukip ‘exploiting grooming scandal’ to secure party’s first police chief
Nigel Farage: 'There’s nothing wrong with white people blacking up'
Muslims, immigration and teenage pregnancy: British people are ignorant about almost everything
Nigel Farage and Frankie Boyle clash over Andrew Lawrence's 'Mock the Week' criticism
iJobs Money & Business
£20000 - £23250 Per Annum pro rata: Clearwater People Solutions Ltd: Pro rata ...
£40 - 48k + Benefits: Guru Careers: We are seeking a Marketing Manager to join...
£45,000 - £65,000: Saxton Leigh: Our client is a well-known APAC Corporate and...
£60000 per annum: Ashdown Group: Compensation and Benefits Manager - Compensat...