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Technology Stocks : JDS Uniphase (JDSU) -- Ignore unavailable to you. Want to Upgrade?

To: Sam2482 who wrote (21002)	7/29/2001 1:53:26 PM
From: puborectalis	Respond to of 24042

Telecoms have bottom....look at the value buyers.........Pirelli Group Buys 23% of Olivetti; Colaninno to Quit (Update1) By Eric Sylvers Milan, July 29 (Bloomberg) -- Pirelli SpA and the Benetton family agreed to buy 23 percent of Olivetti SpA for 7 billion euros ($6 billion) to become the main investors in the company that runs Telecom Italia SpA, Italy's dominant phone company. The bid values Olivetti at 4.17 euros a share, almost twice Friday's closing price. The stake is being sold by a holding company owned by Telecom Italia Chief Executive Roberto Colaninno and his partners. Colaninno will no longer run Olivetti or Telecom Italia, an Olivetti official said. ``Paying this much is an insult to all of Olivetti's other shareholders,'' said Carlo Gentili, a partner at Hedge Fund company Nextam Partners. ``You need to pay a premium to get control, but this is an awful lot.'' Olivetti's share price has dropped almost 30 percent since Colaninno orchestrated the May 1999 purchase of a controlling stake in Telecom Italia for $30 billion, Italy's biggest hostile takeover. Pirelli and the Benetton's are now taking over Colaninno's stake in the company that controls about 90 percent of Italy's traditional phone market. Telecom Italia also owns the country's largest mobile phone business, Italy's No. 1 Internet company and two television channels. Colaninno is expected to step down as chief executive of Olivetti and chairman and chief executive of Telecom Italia tomorrow, an Olivetti official said. Cable, Phones & Debt Pirelli, Europe's biggest cable maker, and Edizione Holding SpA, an investment company controlled by the family behind the Benetton Group SpA clothing chain, will jointly control 27 percent of Olivetti after the purchase. They are investing in a company with 40 billion euros in debt, of which 22 billion euros is held by Telecom Italia. European rival Deutsche Telekom AG has about 70 billion euros in debt while British Telecommunications Plc owes about 28 billion pounds ($39 billion). ``Telecom Italia has a strong market position and we wanted to invest in telecoms so the fit made sense,'' said Pirelli Chief Executive Marco Tronchetti Provera, whose company makes fiber optic cables and tires. Bell SA, a holding company controlled by Colaninno and his partners, accepted the offer for its Olivetti shares, Tronchetti Provera said at a press conference in Milan yesterday. After the purchase, Pirelli will own 60 percent of a company set up to buy the shares, while the rest will be owned by Edizione. Pirelli and Edizione each already owned 1.8 percent of Olivetti and together will own 27 percent of the company's shares once the acquisition of Bell's stake is concluded. Pirelli will cover it's part of the purchase with the proceeds from last year's sale of an optical systems business to Cisco System Inc. and the sale of an optical components unit to Corning Inc. Those asset sales raised almost $6 billion. Falling Value Since Colaninno bought control of Telecom Italia, the market value of Olivetti has dropped to about half the value of the company's 55 percent stake in Telecom Italia's common shares. Olivetti is worth about 17 billion euros, while Telecom Italia has a market value of about 69 billion euros. Tronchetti Provera said more details on Pirelli's plans for Olivetti and Telecom Italia will be outlined at a press conference scheduled for 10:30 Monday in Milan. Lazard LLC and Merrill Lynch & Co. advised Pirelli on the acquisition while Bell was advised by J.P. Morgan Chase & Co.