LONDON (CNNfn) - Olivetti SpA, Italy's No. 2 telecommunications firm, said its board will meet Sunday to discuss "a strategic and financial operation."
The announcement came amid reports Olivetti was set to launch a bid for its larger rival Telecom Italia.
Olivetti could not be reached to confirm the reports. Earlier the group issued a statement that any bid for Telecom Italia was an issue for the board.
Italian newspaper reports suggested that Olivetti is preparing a 100 trillion lire ($58 billion) bid for the formerly state-owned Telecom Italia. The reports led the Italian stock market watchdog to demand more information from Italy's second largest telecom company.
According to the reports, Olivetti's chief executive Roberto Colaninno has put together a consortium of Italian and international investors to bid for Italy's largest telecom group.
The newspapers reported that Merrill Lynch and investment bank Donaldson, Lufkin & Jenrette, were advising Olivetti on the deal. Reuters reported that DLJ refused comment.
Olivetti derives 67 percent of its $3.95 billion sales from its telecom business, and together with Mannesmann (FMMN) of Germany has a controlling stake in Italian-based Omnitel, Europe's second largest cellular phone company.