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Olivetti mulls asset rejig
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May 4, 2000: 8:19 a.m. ET
Italian telecom operator may simplify structure to aid shares, ease debt burden
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LONDON (CNNfn) - Italian telecom operator Olivetti said on Thursday it was mulling a corporate restructuring to simplify its structure, at the same time denying it had held takeover talks with U.S. conglomerate General Electric.
Chief Executive Robert Colaninno said the Olivetti board would consider merging Olivetti with Tecnost, the holding company for assets including Telecom Italia and Telecom Italia Mobile (TIM), which Olivetti
secured after a lengthy hostile battle with Deutsche Telekom (FDTE) last May.
The complex ownership structure of Olivetti's telecom interests - it has a majority stake in Tecnost, which in turn holds majority shares in TI and TIM -- has depressed share prices of all companies within the group since the purchase of Telecom Italia, which left Tecnost with a  14.9 billion ($13.5 billion) debt burden.
Analysts suggested a merger might consolidate Olivetti's control over all of the telecom assets and lower its borrowing costs.
Tecnost stock climbed 6.1 percent to 4.32 while Telecom Italia shares rose 4.7 percent to 4.14 after the announcement.
Last November shareholder opposition forced Olivetti was forced to reverse a plan to transfer ownership of TIM to Tecnost to get access to additional cash flow to help pay down the debt. Minority investors blocked the stock swap that Olivetti had proposed because they said it undervalued their TIM shares.
Colaninno accompanied the announcement by denying persistent market speculation that his company may be subject to a bid from U.S. conglomerate General Electric (GE: Research, Estimates) or Italy's Inil, the holding company for the Agnelli family, which controls automaker Fiat. He said the two firms had "no interest" in a deal with Olivetti. 
-- from staff and wire reports
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