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No Decision Yet on Telecom Italia Deal

April 20, 1999|From Bloomberg News

ROME — Telecom Italia failed Monday to approve what it called a "merger of equals" with Deutsche Telekom after the board of Italy's No. 1 phone company met almost 10 hours without deciding.

The Italian company's board will reconvene today in Rome for more discussion of the proposal, which is expected to be approved, a board member said. The companies now plan to have a joint news conference Wednesday at the earliest. Previously, Italian officials had scheduled a conference today in London to announce the merger.

Deutsche Telekom, Europe's No. 1 phone company, is considering offering as much as $107 billion in stock for Telecom Italia, beating Olivetti's hostile takeover offer of $65 billion in cash, bonds and stock, people familiar with Telecom Italia said.

"I don't believe in logistical reasons," Olivetti Chief Executive Roberto Colaninno said. "There is something fishy about this cancellation."

The Telecom Italia and Deutsche Telekom boards met separately on the plan Monday, with the Italian company's directors discussing the takeover until 10:30 p.m. local time.

The proposed alliance with Deutsche Telekom is the latest twist in a two-month battle between Telecom Italia and Olivetti, which is seven times smaller than its prey. Speculation that Telecom Italia would scramble to arrange a higher rival bid intensified after Chief Executive Franco Bernabe a week ago failed to win shareholder support for his plan to thwart Olivetti.

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