Pirelli Reiterates Open To All Options On Olimpia Stake Sale

MILAN -(Dow Jones)- Tires-to-telecom group Pirelli reiterated Friday it is open to all options regarding the possible sale of its 80% stake in holding company Olimpia, through which it controls Italy's largest telecom company Telecom Italia.

In a statement issued in response to several reports in the Italian press on a plan by Italian banks to buy Pirelli's stake in Olimpia, Pirelli said it would only consider offers that ensure "equal conditions" to all Pirelli's shareholders.

"All the possible options will be explored in order to best bring out the strategic value of the Olimpia asset, not excluding a sale of the holding," Pirelli said in its statement.

Those comments reiterated an announcement it had made Monday in which it unveiled a big turnaround from its previous strategy. The about-face by the tire maker - which controls 18% of Telecom Italia through unlisted holding Olimpia - came after the declining value of its investment in the phone group forced it to post a net loss for 2006.

In November Pirelli wrote down the value of its Olimpia stake by EUR2.1 billion, valuing Telecom Italia shares at EUR3 each, still well above Telecom Italia's market price.

Pirelli's statement that it was prepared to sell its controlling interest in Telecom Italia could run up against the Italian government's desire to ensure the country's former phone monopoly isn't sold to foreigners.

According to several reports in the Italian press, a group of Italian banks, which would include Intesa Sanpaolo and Capitalia, is considering buying part or all of Pirelli's stake in Olimpia.

Intesa Sanpaolo and Capitalia declined to comment on the matter.

Olimpia shares control of Telecom Italia with investment bank Mediobanca, which owns 1.5%, and insurer Assicurazioni Generali, which has a 3.7% stake.

According to the press reports, Mediobanca and Generali also would take part in the plan, aiming at the final exit of Pirelli Chairman Marco Tronchetti Provera from his Telecom Italia holding.

Mediobanca and Generali weren't immediately reachable for a comment.

A person familiar with the situation told Dow Jones Tuesday the sale could take place within two weeks, ahead of a Telecom Italia shareholders meeting in mid-April that will elect a new board.

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

(Sabrina Cohen also contributed to this article.)

(END) Dow Jones Newswires"

Posted to the site on 16th March 2007