U.S. News

AT&T Open to Italian Partners in Torn Telecom


AT&T says it is open to Italian partners in Telecom Italia as it aims to buy a controlling interest in Italy's biggest telecoms operator, where investors are at loggerheads over the sacking of its chairman.

The head of corporate development for AT&T -- which is in talks along with Mexico's America Movil about buying Telecom's holding company -- told a newspaper he could only comment further when proposals arrived.

"We are absolutely ready to take into consideration the interests of Italian industrial and financial partners," Rick Moore said in an interview published in Thursday's edition of leading newspaper Corriere della Sera.

The U.S. and Mexican companies are in exclusive talks with Pirelli about buying 66% of Olimpia – a holding company which owns 18% of Telecom Italia.

Shares in Telecom Italia were up 1.02% at 2.43 euros, while Pirelli gained 1.88% in a flat market.

The discussions, which could give control of the 45 billion euro group for about 4.5 billion euros ($6.01 billion), have turned up the volume in a debate over protectionism and fired speculation European or domestic alternatives could emerge.


Italian bank Mediobanca, insurer Generali and bank giant Intesa Sanpaolo are said by newspapers to be working on alternatives for Olimpia, pressured by the centre-left government of Prime Minister Romano Prodi.

Prodi's row with Telecom Italia over asset sales last year led to the resignation of Marco Tronchetti Provera as chairman -- a post which carries more weight than chief executive.

Tronchetti, who still heads Pirelli and is ultimate owner of Telecom, has held talks with a number of possible investors as he seeks to sell the Telecom holding, which he counts at a loss.

This week, Spain's Telefonica and France Telecom newspapers have reported to be preparing bids.

Telefonica and France Telecom have declined to comment.

SocGen analysts said in a note on Thursday that if Telefonica were approached by Italian banks, government or Telecom Italia management and got necessary guarantees, "we believe the company would probably reconsider its position."

An industry source familiar with the situation said companies such as France Telecom "could not afford to ignore" the increasingly complex Telecom Italia saga.

For the Americans and Mexicans, there is no wish to pursue a deal if the government is hostile, a source close to the operation said.

Opposition to the U.S.-Mexican talks has come from coalition politicians and other investors in Telecom Italia – including Mediobanca and Generali -- who slammed on Wednesday the sacking of Chairman Guido Rossi and called for an emergency meeting of Pirelli's key investors.

The official Rome government line is that board decisions are "sacred" and Prodi, a former president of the European Commission, has said only that he cannot pronounce on offers that were not sent to him.

But his telecommunications minister, Paolo Gentiloni, has said he is "very concerned" about the U.S. talks and Piero Fassino, head of the largest party in the government, has said the network should stay in Italian hands.

AT&T's Moore said his company had a "growth strategy" for Telecom and reassured over jobs, while America Movil's head, Mexican billionaire Carlos Slim, is keener on Telecom Italia's Brazilian assets than its domestic base.