Telecom Italia up as mammoth telco deal seen reshaping sector
Shares in Telecom Italia rose 3 percent in early trade on Monday, extending a rally amid renewed speculation it may join a sector merger wave as Verizon Communications and Vodafone were set to announce a $130 billion deal.
Shares in Telecom Italia were up 4.3 percent at 0.5520 euros, after rising as high as 0.5540 euros, their highest level since mid June.
Italy's biggest telecoms group is seen in need of finding an industrial partner that could help it revive its fortunes while a harsh economic recession and increased competition eats into its margins in Italy.
The company, controlled by a group of shareholders that also include rival Telefonica, also needs to strengthen its capital base to avoid a credit rating downgrade.
"Clearly the market is betting some kind of deal might be in the pipeline, although there is nothing concrete yet," said Ifigest fund manager Roberto Lottici.