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 Russell Brand accuses FOX News anchor Sean Hannity of terrorism after aggressive Israel-Gaza debate
- 2 Pope Francis issues top 10 tips for happiness – including don’t try to convert other people
- 3 Arturo Vidal to Manchester United: Midfielder set to force through move to Louis van Gaal's Red Devils - reports
- 4 Disney heiress Abigail disowns her share of family profits in West Bank company
- 5 Israel's propaganda machine is finally starting to misfire
Russell Brand accuses FOX News anchor Sean Hannity of terrorism after aggressive Israel-Gaza debate
Pope Francis issues top 10 tips for happiness – including don’t try to convert other people
Sabina Altynbekova, the girl branded 'too good looking' for volleyball, says social media obsession with her is a 'bit much'
Justin Bieber posts Instagram photo of Orlando Bloom crying after Ibiza fight 'over Miranda Kerr'
Disney heiress Abigail disowns her share of family profits in West Bank company
The secret report that helps Israel hide facts
Land for gas: Merkel and Putin discussed secret deal could end Ukraine crisis
Woman and two children killed by mob in riots over 'blasphemous' Facebook post in Pakistan
Putin is 'thuggish, dishonest and reckless', says British ambassador to US
Richard Dawkins tweets: 'Date rape is bad, stranger rape is worse'
Boozy, ignorant, intolerant, but very polite – Britain as others see us
- < Previous
- Next >
iJobs Money & Business
£20000 - £24000 per annum: Harrington Starr: A leading provider of web based m...
£28000 - £32000 per annum: Ashdown Group: Secretary (Sales Team Support) - Mat...
Competitive (DOE): Guru Careers: We are looking for an Assistant Management Ac...
£600 - £700 per day + competitive: Orgtel: Senior Investment Accounting Change...