Reuters: Technology News: Eyeing Telefonica, Italy considers change to takeover law

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Eyeing Telefonica, Italy considers change to takeover law Sep 26th 2013, 16:40 ROME | Thu Sep 26, 2013 12:40pm EDT ROME (Reuters) - The Italian government is considering changes to corporate law that could force shareholders owning less than 30 percent of a company to launch a takeover bid, a senior Treasury official said on Thursday. "Companies could be allowed to set out a threshold in their own statutes below the one set by law," state undersecretary at the Economy Ministry Alberto Giorgetti told parliament. Existing law obliges an investor holding 30 percent or more of a company's stock to make a bid for the rest. Giorgetti's suggestion came after Spain's Telefonica clinched a deal this week to take full ownership of a holding company that controls Italy's dominant telecoms group, Telecom Italia. The holding company, Telco, owns 22.4 percent of Telecom Italia. Speaking during a hearing on the Telco deal, Giorgetti said companies would not be allowed to raise the mandatory takeover threshold beyond 30 percent but may be allowed to set a lower limit. If that happened, Telecom Italia could force Telefonica to acquire it for around 1.1 euros per share - the price at which the stock was valued in the Telco takeover announced on Tuesday. Under existing law, Telefonica would only be obliged to buy the rest of Telecom Italia if it took a controlling stake in Telco and if Telco's stake in Telecom Italia exceeded 30 percent, market watchdog head Giuseppe Vegas said on Thursday. Shares in Telecom Italia rose as much as 6 percent following Giorgetti's comments before paring the gain. The shares closed up 4.1 percent at 0.595 euro. NETWORK VETO The growing prospect of Telecom Italia and its strategic fixed-line network falling under Telefonica's control has angered Italian politicians and trade unions concerned about national security, job losses and the pace of investment. Telecom Italia is going ahead with a project to separate the fixed-line network from the rest of the business, but the operation is complex and may need more than a year to complete. Such a spin-off would pave the way for state lender CDP to buy a stake in the network. Giorgetti said the government was also committed to pushing through changes to its veto on strategic changes in the energy, transport and telecommunications sectors, while respecting European laws. According to a draft decree seen by Reuters on Thursday, the special powers could be extended to the network of Telecom Italia and to cover companies in the communications sector where national interests are at stake. Telecom Italia's fixed-line network is Italy's largest telecoms infrastructure, linking millions of users from private citizens to government agencies, banks and businesses. (Reporting By Giuseppe Fonte; writing by Catherine Hornby and Danilo Masoni; editing by Stephen Jewkes and Tom Pfeiffer) Link this Share this Digg this Email Reprints

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