Olivetti Controls Telecom
Olivetti agreed to a 51 percent stake in Telecom Italia SpA on Saturday, completing its David vs. Goliath attempt for control of the telecommunications giant.
After a three-month takeover bid, Olivetti settled for the narrow majority stake in Italy's No. 1 phone company even though the firm had hoped to win 67 percent. That would have given Olivetti a controlling interest in Telecom, which is five times larger.
Olivetti, a typewriter and computer manufacturer that has moved into telecommunications, held a meeting Saturday at its headquarters near Milan, where the company's board decided to accept the stake garnered in Europe's largest-ever hostile corporate takeover.
Milan stock market officials had announced the 51 percent figure Friday.
Â"The boards of Olivetti and Tecnost have decided to accept the shares tendered in the offer, and Olivetti will go ahead with its industrial plan for TI,Â" Olivetti's chief executive, Roberto Colaninno, told reporters Saturday.
Tecnost is the Olivetti unit used as the vehicle for the takeover of the former state-run monopoly.
Champagne flowed Friday night at Mediobanca, the merchant bank that backs Olivetti, Italian news reports said. Applause could be heard coming from inside the usually staid bank.
Colaninno said that the management handover will take place between Â"gentlemen,Â" in an absolutely Â"friendly mannerÂ" and not in the courts. He was expected to meet with his counterpart at Telecom Italia, Franco Bernabe, on Monday, when the transition phases will be mapped out.
On Thursday, Olivetti had less than 20 percent of Telecom Italia's shares. But on the final day for securing shareholder backing, most of Telecom Italia's strongest supporters, including the IFIL holding company of the Agnelli industrial dynasty, jumped ship.
The takeover bid by Olivetti, which was being dragged down only a few years ago by its personal computer division before it moved into telecommunications, was particularly bold, going up against one of the world's largest telecommunications companies.
Olivetti had said it needed at least a 35 percent stake to press ahead with its plan to acquire Telecom for $12.15 at current exchange rates.
Olivetti's success appeared to doom Telecom's proposed defensive merger with its German counterpart, Deutsche Telekom.
Colaninno said the possibility of a merger of Tecnost and Telecom will be the subject of many long discussions in the coming weeks.
Into next year, the Italian government, as part of the arrangement that privatized Telecom, holds a so-called golden share, a 3.43 percent stake in the phone company that it allows it veto power over major changes such as new control or ownership.
But it appeared doubtful that the Italian government, which didn't exercise the veto power during the takeover bid, would try now to thwart new management.
Finance Minister Vincenzo Visco indicated he didn't see any reason for the golden-share mechansm to come into play, the Italian news agency AGI reported Saturday.
Â"Everything played out in a transparent matter,Â" Visco was quoted as saying, after calling now for a Â"credible industrial plan with international alliances.Â"