Italy's stock exchange regulatory authority, Consob, gave the green light to Olivetti's 102 trillion lire ($US58 billion) hostile bid for Telecom Italia on Saturday, a move welcomed yesterday by the Milan stock market, which saw the shares of both companies move ahead strongly in early trading yesterday.
The bid, which was originally presented February 20 and then revised five days later, now provides the market with necessary information, Consob said in a statement. The offer to purchase Telecom Italia is conditional on Olivetti obtaining ministerial and antitrust authorisations for the sale of its fixed-line and mobile phone subsidiaries.
Consob's authorisation of the bid means that Telecom Italia must refrain from taking defensive measures -- such as merging with its mobile phone subsidiary Telecom Italia Mobile (TIM) -- unless it obtains the backing of at least 30 percent of its shareholders.
Olivetti's bid will be successful if it is accepted by at least 67 percent of Telecom Italia stockholders. The bid, which values Telecom Italia ordinary shares at 10 euros ($US11), will have to be increased if it is to succeed, stock market analysts said. If Olivetti fails to get sufficient support for its takeover bid, the two sides could yet reach a compromise letting Olivetti's backers take a significant stake in Telecom Italia even if they fall short of achieving overall control, observers said.