Telecom Italia Shareholders Reject $1 Billion Telefonica Offer

MILAN (Reuters) – Core Italian shareholders in Telecom Italia <TLIT.MI> this month rejected an 800 million euro (628 million pounds) offer from Spain’s Telefonica <TEF.MC> to buy part of their stakes, Italian business newspaper Il Sole 24 Ore said on Tuesday.

Telefonica is the biggest shareholder in Telco, the holding that controls Telecom Italia with a 22.4 percent stake. Telco also includes Italian banks Intesa Sanpaolo <ISP.MI> and Mediobanca <MDBI.MI>, as well as insurer Generali <GASI.MI>.

In an unsourced report, the newspaper said Telefonica asked the Italian shareholders to remain in Telco in order to avoid potential antitrust problems in Latin America, where Telefonica and Telecom Italia are competitors.

The paper said the Italian investors spurned the offer, which it said was made in early September, and that negotiations were “very complicated and difficult”.

It said an outright merger between Telefonica and Telecom Italia was out of the question.

A source close to the situation has said Telefonica has been considering an offer to buy out Telco’s Italian shareholders after they signalled their intention to sell their stakes.

Such a proposal was expected to be discussed at a Telecom Italia board meeting on September 19, but the meeting was delayed to October 3, Chairman Franco Bernabe said on Monday.

Telecom Italia and the three Italian shareholders were not immediately available for comment, while Telefonica could not immediately be reached for comment.

($1 = 0.7489 euros)

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