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Telecom Italia Shareholder Wants Telefonica to Sell Stake

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Telefonica's bid to buy out Portugal Telecom's stake in their Brazilian joint venture has triggered a call for the company to sell its indirect stake in Telecom Italia, which also has operations in Brazil.

"Regardless of whether or not they succeed in their acquisition, it is common sense that Telecom Italia can no longer have Telefonica as a controlling stake owner when their intended strategy is now in direct conflict with the future prospects of our strategic Brazilian asset TIM Brasil," Telecom Italia's second-biggest shareholder, Marco Fossati told Bloomberg News.

Telefonica has an indirect stake in Telecom Italia through a holding company, Telco SpA, which controls around 22.5% of the Italian company. Other investors in Telco are Mediobanca, Assicurazioni Generali and Intesa Sanpaolo.

"Telefonica has been quite clear that it has no intentions to merge with Telecom Italia so we can't have them in a position of influence now that their desire strategy has been unveiled," Fossati said in the interview. "While we have not spoken directly to any Telco members, we can only assume that the other Italian members of Telco are in the process to discuss with Telefonica about their orderly exit from Telco."

There have however been occasional rumours that Telefonica would seek a merger with Telecom Italia after the Spanish firm paid EUR2.3 billion for 42.3% of the holding company, Telco in Oct 2007. Such a move would be politically sensitive as the Italian government has openly stated that it would oppose any transaction that saw the Italian landline network falling under foreign management.

On the web: Bloomberg News

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Tags: telefonica  telecom italia  vivo  portugal telecom  Brazil  Italy