The head of Italian communications group Olivetti delivered a veiled warning yesterday to its bid target Telecom Italia that it could fall into foreign hands unless it accepted Olivetti's $58 billion (€52 billion) hostile bid.
In a sharp dig at the cluster of banks, insurance firms and the powerful Agnelli family making up Telecom's shareholder "hard core", chairman Mr Antonio Tesone said its prey lacked determined control and was vulnerable to any "foreign offensive".
"The thing that counts above all, our fundamental objective, is to guarantee that at least the telecommunications industry remains in Italian hands," Mr Tesone said.
In true David-and-Goliath style, Olivetti on Saturday announced a staggering 10 euros per share cash, bonds and share offer for its five-times larger rival Telecom, leaving the former state monopoly potentially needing a white-knight saviour.
No outside company was immediately advertising itself as the answer to Telecom's prayers although some analysts have cited British Telecom as a potential rescue partner.
Industry sources confirmed a startling twist in what was shaping up as one of Europe's biggest takeover battles - that Telecom executives had looked at the possibility of outgunning its predator Olivetti with a rival in-house offer.
But any attempt to use its cellphone unit TIM to launch a counter-offer would be sure to run into complicated legal hurdles that could leave Telecom with no option but to look for a white knight to ride to its rescue.
Olivetti started as it meant to go on in what is fast becoming a bloody battle for Europe's fourth largest telecoms firm and the world's 11th in terms of market capitalisation.
It announced the bid a day early, without warning, after Tesone said the company got wind Telecom was planning its own manoeuvres. He called it a "race against the clock".
Tesone said many key industrial sectors were already "monopolised" by foreigners and it was important the telecommunications sector did not go the same way.
"After the fiasco of the Volvo affair, the car industry also risks ending up abroad," he said. Volvo shunned Italy's FIAT in favour of a deal with Ford.
British Telecom yesterday declined to comment on market speculation that it might emerge as a white knight for Telecom Italia against Olivetti's hostile bid.
