Telecom Italia Chairman Defends TIM Buyout Offer

MILAN -(Dow Jones)- Telecom Italia Chairman Marco Tronchetti Provera Tuesday defended his proposed offer to buy shares in mobile unit Telecom Italia Mobile from minority investors, rejecting as "mistaken" criticism that offer was too low.

Telecom Italia is offering TIM minority holders up to EUR14.5 billion, or EUR5.6 a share, for two-thirds of the shares in the cellular unit it doesn't already own. Telecom Italia owns 56% of TIM.

The company will offer 1.73 of its own shares for the remaining shares in TIM, with which it plans to merge.

"In the past month, TIM's shares have risen 20%, and on top of this we have given another 8% premium," Tronchetti Provera said at a press conference held to outline the deal.

"TIM has had a target price of around EUR5.2 and we are offering EUR5.6," Tronchetti Provera continued.

He said that in view of these two considerations, "it seems to me that (these criticisms) are mistaken."

Tronchetti Provera was responding to a question citing investor criticism that the EUR5.6 cash offer for TIM shares fails to account for some analysts belief that TIM's minority shareholders have already suffered a lower value for their investment due to debt at the parent company level.

-By Brian Lagrotteria , Dow Jones Newswires; +39-02-58-21-99-06; brian.lagrotteria@dowjones.com

(END) Dow Jones Newswires "

Posted to the site on 7th December 2004