Pirelli may sell entire Telecom Italia stake

14 Mar 2007

Italy’s Pirelli group is considering selling its entire stake in Telecom Italia holding company Olimpia. Pirelli owns 80% of Olimpia, which is Telecom Italia’s largest single shareholder with an 18% stake. Reports from local press suggest that the deal could be finalised within the next two weeks, allowing the new owners of Olimpia to nominate their own Telecom Italia board members in time for the telco’s shareholder meeting in mid-April. Pirelli had been discussing a sale of part of its Olimpia stake, with the likes of Telefónica of Spain, Sistema of Russia and Hinduja of India all reported to be interested. Dow Jones reports that a group of Italian banks is now leading the interest in taking Pirelli’s entire Olimpia holding. Pirelli posted a net loss of EUR1.17 billion for 2006, down from a net profit of EUR327.4 million in 2005, with the fall due to a write-down of its stake in Olimpia. Pirelli now values Telecom Italia at EUR3 per share, which is still above its current market trading price.

Italy, Telecom Italia (TIM)