AT&T has backed off from talks with Pirelli, which is selling a 33 percent stake in a holding company that has an 18 percent controlling stake in Telecom Italia. Pirelli said its stake in Olimpia is still for sale, but only at a price of €3.0 per share. AT&T reportedly offered the company €2.82 per share, excluding dividends. AT&T said it was pulling out of exclusive talks to buy the stake in Olimpia because of regulatory concerns. Italian banks, including Intesa Sanpaolo and Mediobanca offered some €2.6 per share, while talks between Pirelli and Mexico's America Movil continue to push forward. Pirelli's chairman Marco Tronchetti Provera said, "Pirelli is solid and has all the time to wait and assess the offers that could possibly arrive."
Ovum analyst Mike Cansfield issued a statement regarding the telecom's pullback: "Concern in the Italian government about foreign ownership of what it sees as strategic national assets is the cause of the breakdown. Not unreasonably AT&T sees this proposed investment as too risky, so it has withdrawn. Interestingly America Movil has not (yet) followed suit, although it would be a surprise to us if this did not happen."
For more on the Telecom Italia stake:
- check out this article from AFX