Telecom Italia Chairman Says Won't Alter TIM Bid-Report

MILAN -(Dow Jones)- Telecom Italia SpA (TI) Chairman Marco Tronchetti Provera said Tuesday Italy's largest telecommunications company won't alter its EUR20 billion buyout offer for minority shares in its mobile unit.

"There won't be any hike," Tronchetti Provera said at an unrelated company presentation, MF-Dow Jones reported.

In an arrangement that expires Friday, Telecom Italia is offering EUR5.60 a share for at least two-thirds of the TIM shares it doesn't already own. It will offer 1.73 Telecom Italia shares for remaining TIM shares in a merger planned later this spring.

Tronchetti Provera said he is confident the offer would succeed, saying it is "in the interest of everyone."

At the end of Monday, only 5.7% of the targeted shares had been tendered, according to the Italian stock exchange.

But investors typically wait until the last day or two of an offer to tender their shares.

In a magazine interview published last weekend in Italy, Tronchetti Provera warned that the share prices of both Telecom Italia and TIM could drop sharply if the offer fails. Shares in both companies have recently risen more than 20% in as news of the buyout plan emerged.

At 1200 GMT, TIM shares were unchanged at EUR5.55, while Telecom Italia stock was unchanged at EUR3.14.

Telecom Italia is financing the TIM buyout with EUR14.5 billion in debt. Tronchetti Provera has said he will explain in the future the industrial synergies of a merger. Analysts note that by taking complete control of TIM, Telecom Italia will obtain around EUR1 billion in annual dividends that have been going to minority investors.

-By Christopher Emsden, Dow Jones Newswires; +39-02-58-21-99-05; chris.emsden@dowjones.com

(END) Dow Jones Newswires"

Posted to the site on 18th January 2005