Telecom Italia Board Also Discussed Telefonica -Board Member

MILAN (Dow Jones)- Telecom Italia's board Friday also discussed a possible interest by Spain's Telefonica in investing in the Italian telecoms company, board member Diana Bracco told journalists at the end of the meeting.

"We also discussed Telefonica" in addition to other topics on the agenda, independent board member Bracco said, without adding any detail.

Telecom Italia's board meeting Friday was scheduled to examine the company's new organizational structure and security issues, according to the official agenda.

But many investors were expecting board members at least to address a possible interest by rival Telefonica.

Pirelli and Telefonica confirmed earlier this week that they are in talks about Telefonica possibly buying a minority stake in Telecom Italia's parent company, Olimpia.

Pirelli holds an 80% stake in Olimpia, an unlisted holding which in turn is the leading shareholder in Telecom Italia, with an 18% stake.

Telecom Italia shares in Milan were trading strongly higher Friday, with investors looking to the outcome of the board meeting and possible news on the Telefonica deal. At 1404 GMT the shares were up EUR0.05, or 2.1%, at EUR2.41 in an overall market that was little changed.

Another independent board member, Jean Paul Fitoussi, later said that none of Telecom Italia's assets are up for sale.

Telecom Italia said in November it was studying unsolicited bids for its Brazilian unit, TIM Brasil. However it later put the brakes on a possible sale. It also scrapped previous plans to sell its mobile operator TIM after the possible sale sparked an open clash with the Italian government.

"Nothing is up for sale," Fitoussi told journalists after the board meeting.

"TIM Brasil stays with us. It's part of our international strategy. It has never been put up for sale," he added.

-By Rosario Murgida, Mf-Dow Jones, and Giada Zampano, Dow Jones Newswires; +39-02-5821 9907; giada.zampano@dowjones.com

(END) Dow Jones Newswires "

Posted to the site on 16th February 2007