Telecom Italia throws cold water on Telefonica merger calls

15 Apr 2008

Former monopoly Telecom Italia (TI) has said it has no plans to merge with Spanish giant Telefonica amid growing disappointment among its shareholders. The company’s shares have been under pressure recently, sparking talks of a possible takeover by Telefonica, which holds a 10% indirect stake in the Italian operator. The Fossati family, which has a 4.45% stake in TI, said that a merger with Telefonica would be the ‘ideal scenario’ and called for a tie-up by 2011. Shares in TI fell more than 4% yesterday after denial of a merger plan sparked a fresh wave of selling. Shares have been hit hard since last month, when new management at the incumbent unveiled a business plan that targeted debt reduction and international growth, but gave investors little hope for improved returns.

Italy, Telecom Italia (TIM), Telefonica