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By Giselda Vagnoni and Jo Winterbottom
TOKYO/MILAN: Italian Prime Minister Romano Prodi said he hoped Telecom Italia would stay in Italian hands as future control of the country's largest telecoms group is up in the air and it waits for a new chairman.
Prodi, speaking on a trip to Japan, said there could be other players, possibly from Europe, after U.S. phone giant AT&T pulled out of talks with Pirelli to buy a majority stake in Olimpia, which controls Telecom Italia.
AT&T's former partners in the talks, Mexico's America Movil and Telmex, said they were weighing options and could look for other partners, go it alone - or pull out.
"It will be a long drawn out game and there will be other protagonists in future," Prodi told reporters while on a visit to Tokyo.
"It seems to me clear that Telecom Italia should remain in Italian hands and I believe that overall perhaps a grouping of European interests could be a positive element in having more influence in the future decision process," he added.
Pirelli's chairman, Marco Tronchetti Provera, has been trying to sell his telecoms investment -- which has lost him money on the books -- for months and he quit as head of Telecom Italia last year in a row with Prodi over strategy.
The telecoms company still awaits a new chairman after Tronchetti's replacement, Guido Rossi, resigned earlier this month because he lacked Pirelli's backing.
Telecom Italia shareholders continue a meeting on Tuesday which should appoint a new head for the company, with best bets on Pasquale Pistorio, a former head of STMicroelectronics.
EUROPEAN OPTIONS?
Pirelli said AT&T withdrew from the latest talks because of possible regulatory problems.
America Movil, owned by billionaire Carlos Slim, and AT&T had been in exclusive talks with Pirelli for a majority in Olimpia, which has 18 percent of Telecom Italia, to buy control of the 44 billion euro company for about 4.5 billion euros ($6.10 billion).
The talks sparked a nationalist debate in Italy and major banks have been working to find alternative solutions which would keep control - especially of the fixed-line network - in domestic hands.
Italy's biggest retail bank, Intesa Sanpaolo, was talking about a three-way split of Olimpia with AT&T and America Movil and its chief executive officer, Corrado Passera, said it was looking at all options, including taking a stake itself.
Investment bank Mediobanca is also working on a deal which newspapers have said could involve Spain's Telefonica, whose interest is likely to have heightened following the emergence of Slim, its arch-rival in Latin America.
America Movil tried to buy Telecom Italia's Brazilian mobile operations last year and on Monday, Italy's infrastructure minister Antonio Di Pietro said Slim's current talks were an attempt to "suck out the marrow of Tim Brasil" referring to Telecom Italia's mobile business in Brazil.
France Telecom named Morgan Stanley as adviser in looking at possible options, newspapers have reported.
Reuters
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