The board of directors of Telecom Italia met last Thursday to discuss its tie up with Hutchison Whampoa of Hong Kong. The main bone of contention is that Hutchison wants to have nearly 30% shareholdings in the Italian telecommunications giant.
This is the quandary now faced by current Telecom Italia chairman Franco Bernabe who has been under pressure to improve profits and unload much of the debts the company has been burdened with. The plan being mapped out is the initial purchase of Hutchison of a 12% stake currently held by three Italian investors. From there, Telecom Italia would merge with Hutchison's 3Italia mobile unit company for a further 18% of the group shareholdings.
Sources familiar with the transaction who spoke on condition of anonymity told Reuters that Bernabe may be given the authority to further explore possibilities beyond preliminaries.
On the sidelines though are a group of investors known through their shareholdings company Telco have not issued a public statement regarding the possible transaction. The group includes Telefonica, the Spanish telecommunications company together with three other Italian financial institutions.
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