Telecom Italia Chairman Calls Talk of Merger With Orange "Fantasy"--Update
March 11 2016 - 8:37AM
Dow Jones News
(Adds context, Recchi comments)
By Manuela Mesco
MILAN--Telecom Italia SpA's (TI) Chairman Giuseppe Recchi Friday
said that a merger with France's Orange SA (ORA.FR) was "pure
fantasy," following comments from the French firm's chief executive
referring to a possible operation involving the Italian telecom
operator.
Earlier this week, Orange Chief Executive Stephane Richard said
he may look at an operation involving the Italian company if asked
to do so by Telecom Italia's largest shareholder, French media
company Vivendi SA (VIV.FR). He added that he thought such an
invitation was unlikely.
Following Mr. Richard's comments--as well as statements from
Italian Prime Minister Matteo Renzi and French President Francois
Hollande that they want to create major companies that can compete
in Europe--Telecom Italia's stock price rose as much as 4% on
Wednesday to then close up 1.6%.
Speaking on the sidelines of an event in Milan, Mr. Recchi
accused the Orange CEO of repeatedly making statements about an
operation "that is only in his mind" and "hasn't found any
validation within our board."
He stressed that responsibility should be taken for repeatedly
referring to operations that don't exist as these statements can
affect share prices.
"I'm tired of seeing our company constantly involved in
[speculation about] a possible operation that today is not even
[being considered]," Mr. Recchi said. "It's pure fantasy."
Last year, speculation about a deal rose after Mr. Richard
publicly expressed interest in Telecom Italia. Orange's CEO later
played down the comments, saying he believed a deal with Telecom
Italia could be attractive but he had no plans to pursue it.
A spokesman for Orange said there was no project to do a deal
with Telecom Italia following Mr. Richard's comments earlier this
week.
Mr. Recchi also said cross-border consolidation doesn't
necessarily create value, while national consolidation makes more
sense from an industrial standpoint.
"The only synergies [in cross-border consolidation] are
financial and not industrial," Mr. Recchi said.
Friday, Telecom Italia's share price rose over 4%, part of a
wider rally from highly indebted companies following the ECB's
decision Thursday to lower interest rates.
Write to Manuela Mesco at manuela.mesco@wsj.com
(END) Dow Jones Newswires
March 11, 2016 08:22 ET (13:22 GMT)
Copyright (c) 2016 Dow Jones & Company, Inc.
TELECOM ITALIA SPA CL A (NYSE:TIA)
Historical Stock Chart
From Jun 2024 to Jul 2024
TELECOM ITALIA SPA CL A (NYSE:TIA)
Historical Stock Chart
From Jul 2023 to Jul 2024