Telecom Italia shareholders up in arms over restructuring plan

13 Mar 2003

The plan by Telecom Italia [NYSE: TI] chairman Marco Tronchetti Provera to simplify the ownership structure of the group has provoked angry protest from shareholders. Mr Provera is the main shareholder in the Olimpia consortium which controls 30% of Olivetti, the holding company which in turn owns 55% of the Telecom Italia. Under his plan, seven Olivetti shares will be traded for each Telecom Italia ordinary share. This has angered many minority shareholders who believe each Telecom Italia share to be worth ten and 20 Olivetti shares. According to the Financial Times, Olivetti shareholders who reject the deal will be offered between EUR1 and EUR1.12 for each of their shares – well above current market prices. Olivetti and Telecom Italia shareholders are due to vote on the proposed merger in late May; Mr Provera must get at least two thirds of the vote to get his plan approved. Telecom Italia shares fell almost 11% yesterday.