The financial engineering by which Telecom Italia has been beset for more than a decade was ratcheted up yesterday, as Pirelli raised its stake in Olimpia, the vehicle created by it and Benetton when wresting control from Olivetti. By kicking out two Italian banks. it arguably weakened the ‘hard core of institional investors who have repeatedly stood by as ownership of TI is traduced from one industrial conglomerate to the next.

The mood was bullish: “Pirelli & C. SpA today finalised the acquisition of the stakes in Olimpia SpA held by Banca Intesa SpA (4.77%) and Unicredito Italiano SpA (4.77%) for a consideration of approximately 585 million euros for each bank, as foreseen in the agreements between the parties which lapsed today following the exercising by the banks of their exit rights as announced in March 2006.”

While a political and commercial storm rages over TI’s future strategy, under the guidance of Pirelli, this latest move does not inspire confidence. At all. Telecom Italia is being eaten alive by carnivorous or cannibalistic Italian industrialists once more.
Jim Chalmers