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SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
SCHEDULE 13D/A
(Rule 13d-101)
(Amendment No. 36)
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TELECOM ITALIA S.P.A.
(Name of Issuer)
ORDINARY SHARES OF EURO 0.55 PAR VALUE EACH 87927W10
(Title of class of securities) (CUSIP number)
DOTT. GIANNI MION
SINTONIA S.P.A.
CORSO DI PORTA VITTORIA 16
20122 MILAN
ITALY
(+39) 02-549241
WITH A COPY TO:
MICHAEL S. IMMORDINO, ESQ.
LATHAM & WATKINS
99 BISHOPSGATE
LONDON EC2M 3XF
ENGLAND
(+44) 207-710-1076
(Name, address and telephone number of person authorized
to receive notices and communications)
APRIL 28, 2007 and MAY 4, 2007
(Date of event which requires filing of this statement)
If the filing person has previously filed a statement on Schedule 13G to
report the acquisition that is the subject of this Schedule 13D, and is filing
this schedule because of Rule 13d-1(e), 13d-1(f) or 13d-1(g), check the
following box |_|.
NOTE: Schedules filed in paper format shall include a signed original
and five copies of the schedule, including all exhibits. SEE Rule 13d-7 for
other parties to whom copies are to be sent.
(Continued on following pages)
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CUSIP No. 87927W10 13D
-------------------------------- -------------------------------
----------------- ----------------------------------------------------------
1 NAME OF REPORTING PERSON SINTONIA S.p.A.
I.R.S. IDENTIFICATION NO. Not Applicable
OF ABOVE PERSON
----------------- ----------------------------------------------------------
2 CHECK THE APPROPRIATE BOX IF A MEMBER OF A GROUP: (a) |X|
(b) |_|
----------------- ----------------------------------------------------------
3 SEC USE ONLY
----------------- ----------------------------------------------------------
4 SOURCE OF FUNDS: WC
----------------- ----------------------------------------------------------
5 CHECK BOX IF DISCLOSURE OF LEGAL PROCEEDINGS IS
REQUIRED PURSUANT TO ITEM 2(d) OR 2(e): |_|
----------------- ----------------------------------------------------------
6 CITIZENSHIP OR PLACE OF ORGANIZATION: Italy
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NUMBER OF 7 SOLE VOTING POWER: 30,084,650
SHARES
BENEFICIALLY --------- ----------------------------------------------
OWNED BY 8 SHARED VOTING POWER: 2,407,345,359
EACH (See Item 5)
REPORTING --------- ----------------------------------------------
PERSON WITH 9 SOLE DISPOSITIVE POWER: 30,084,650
--------- ----------------------------------------------
10 SHARED DISPOSITIVE POWER: 2,407,345,359
(See Item 5)
----------------- ----------------------------------------------------------
11 AGGREGATE AMOUNT BENEFICIALLY OWNED BY
REPORTING PERSON: 2,437,430,009
----------------- ----------------------------------------------------------
12 CHECK BOX IF THE AGGREGATE AMOUNT IN ROW (11)
EXCLUDES CERTAIN SHARES: |_|
----------------- ----------------------------------------------------------
13 PERCENT OF CLASS REPRESENTED BY AMOUNT
IN ROW (11): 18.22%
(See Item 5)
----------------- ----------------------------------------------------------
14 TYPE OF REPORTING PERSON: CO
----------------- ----------------------------------------------------------
(Page 2)
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CUSIP No. 87927W10 13D
-------------------------------- -------------------------------
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1 NAME OF REPORTING PERSON SINTONIA S.A.
I.R.S. IDENTIFICATION NO. (FORMERLY KNOWN AS
OF ABOVE PERSON EDIZIONE FINANCE
INTERNATIONAL S.A.)
Not Applicable
----------------- ----------------------------------------------------------
2 CHECK THE APPROPRIATE BOX IF A MEMBER OF A GROUP: (a) |X|
(b) |_|
----------------- ----------------------------------------------------------
3 SEC USE ONLY
----------------- ----------------------------------------------------------
4 SOURCE OF FUNDS: WC
----------------- ----------------------------------------------------------
5 CHECK BOX IF DISCLOSURE OF LEGAL PROCEEDINGS
IS REQUIRED PURSUANT TO ITEM 2(d) OR 2(e): |_|
----------------- ----------------------------------------------------------
6 CITIZENSHIP OR PLACE OF ORGANIZATION: Luxembourg
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NUMBER OF 7 SOLE VOTING POWER: 0
SHARES
BENEFICIALLY --------- ----------------------------------------------
OWNED BY 8 SHARED VOTING POWER: 2,407,345,359
EACH (See Item 5)
REPORTING --------- ----------------------------------------------
PERSON WITH 9 SOLE DISPOSITIVE POWER: 0
--------- ----------------------------------------------
10 SHARED DISPOSITIVE POWER: 2,407,345,359
(See Item 5)
----------------- ----------------------------------------------------------
11 AGGREGATE AMOUNT BENEFICIALLY OWNED
BY REPORTING PERSON: 2,407,345,359
----------------- ----------------------------------------------------------
12 CHECK BOX IF THE AGGREGATE AMOUNT IN ROW (11)
EXCLUDES CERTAIN SHARES: |_|
----------------- ----------------------------------------------------------
13 PERCENT OF CLASS REPRESENTED BY AMOUNT
IN ROW (11): 17.99%
(See Item 5)
----------------- ----------------------------------------------------------
14 TYPE OF REPORTING PERSON: CO
----------------- ----------------------------------------------------------
(Page 3)
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CUSIP No. 87927W10 13D
-------------------------------- -------------------------------
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1 NAME OF REPORTING PERSON RAGIONE S.a.p.a. DI GILBERTO
I.R.S. IDENTIFICATION NO. BENETTON E C.
OF ABOVE PERSON Not Applicable
----------------- ----------------------------------------------------------
2 CHECK THE APPROPRIATE BOX IF A MEMBER OF A GROUP: (a) |X|
(b) |_|
----------------- ----------------------------------------------------------
3 SEC USE ONLY
----------------- ----------------------------------------------------------
4 SOURCE OF FUNDS: WC
----------------- ----------------------------------------------------------
5 CHECK BOX IF DISCLOSURE OF LEGAL PROCEEDINGS
IS REQUIRED PURSUANT TO ITEM 2(d) OR 2(e): |_|
----------------- ----------------------------------------------------------
6 CITIZENSHIP OR PLACE OF ORGANIZATION: Italy
--------------------------------------------------------------------------------
NUMBER OF 7 SOLE VOTING POWER: 30,084,650
SHARES
BENEFICIALLY --------- ----------------------------------------------
OWNED BY 8 SHARED VOTING POWER: 2,407,345,359
EACH (See Item 5)
REPORTING --------- ----------------------------------------------
PERSON WITH 9 SOLE DISPOSITIVE POWER: 30,084,650
--------- ----------------------------------------------
10 SHARED DISPOSITIVE POWER: 2,407,345,359
(See Item 5)
----------------- ----------------------------------------------------------
11 AGGREGATE AMOUNT BENEFICIALLY OWNED BY
REPORTING PERSON: 2,437,430,009
----------------- ----------------------------------------------------------
12 CHECK BOX IF THE AGGREGATE AMOUNT IN ROW (11)
EXCLUDES CERTAIN SHARES: |_|
----------------- ----------------------------------------------------------
13 PERCENT OF CLASS REPRESENTED BY AMOUNT
IN ROW (11): 18.22%
(See Item 5)
----------------- ----------------------------------------------------------
14 TYPE OF REPORTING PERSON: PN
----------------- ----------------------------------------------------------
(Page 4)
This Amendment No. 36 amends the Statement on Schedule 13D dated August
9, 2001, as amended (as previously amended, the "STATEMENT ON SCHEDULE 13D")
filed by Edizione Holding S.p.A., a company incorporated under the laws of the
Republic of Italy ("EDIZIONE HOLDING"), Edizione Finance International S.A., a
company incorporated in the Duchy of Luxembourg, and Ragione S.a.p.a. di
Gilberto Benetton e C., a partnership organized under the laws of the Republic
of Italy ("RAGIONE") with respect to the ordinary shares, euro 0.55 par value
per share, of Telecom Italia S.p.A., a company incorporated under the laws of
the Republic of Italy. Capitalized terms used in this Amendment without
definition have the meanings ascribed to them in the Statement on Schedule 13D.
This Amendment is being filed by each of Sintonia S.p.A., Sintonia S.A.
(formerly known as Edizione Finance International S.A.) and Ragione. By virtue
of a demerger, effective on March 2, 2007, Sintonia S.p.A. and Sintonia S.A. are
members of a group with Pirelli and Olimpia with respect to the Telecom Shares
(as defined below).
INTRODUCTION.
Sintonia S.p.A. and Sintonia S.A. (together, the "SINTONIA SELLERS")
and Pirelli intend to sell the entire share capital of Olimpia, the entity which
currently holds approximately 18% of the ordinary share capital of Telecom
Italia S.p.A. ("TELECOM ITALIA"), to a group of investors (the "SALE"). The
group of investors that has agreed to purchase the Olimpia share capital
includes Sintonia S.A. (in such capacity, the "SINTONIA BUYER"). The following
summarizes the potential sale and purchase of such share capital and certain
agreements related thereto.
On April 28, 2007, a group of investors (the "INVESTORS") made up of
Assicurazioni Generali S.p.A. ("GENERALI"), the Sintonia Buyer, Intesa Sanpaolo
S.p.A. ("INTESA SANPAOLO"), Mediobanca S.p.A. ("MEDIOBANCA" and, together with
Generali, the Sintonia Buyer and Intesa Sanpaolo, the "ITALIAN INVESTORS") and
Telefonica S.A., the Spanish-based telecommunications operator ("TELEFONICA"),
entered into a co-investment agreement (the "CO-INVESTMENT AGREEMENT") to
establish the terms and conditions for their participation in Centotrenta 4/6
S.r.l., an Italian company with registered office at Galleria del Corso 2,
Milan, Italy, fiscal code n. 05277610969 to be subsequently transformed and
renamed as Telco S.p.A. ("TELCO"), an Italian corporation through which they
intend to purchase the entire share capital of Olimpia from Pirelli and the
Sintonia Sellers as indicated above (the "CO-INVESTMENT AND PURCHASE"). The
Co-Investment Agreement also covers the capitalization and funding of Telco in
connection with the acquisition of Olimpia and the general framework of the
investment obligations of each of the Investors. In addition to Telco's
participation in Telecom Italia's ordinary share capital through its interest in
Olimpia, pursuant to the Co-Investment Agreement Generali and Mediobanca will
contribute to Telco ordinary shares of Telecom Italia currently owned by them.
These shares amount to 5.6% of Telecom Italia's ordinary share capital, with the
individual contributions of Generali and Mediobanca amounting to 4.06% and
1.54%, respectively, of Telecom Italia's ordinary share capital, bringing
Telco's direct and indirect participation in Telecom Italia's ordinary share
capital to approximately 23.6%. A copy of the Co-Investment Agreement is filed
as Exhibit 85.
(Page 5)
On April 28, 2007, the Investors also entered into a shareholders
agreement (the "SHAREHOLDERS AGREEMENT"), pursuant to which the Investors set
out, among other things, the principles of corporate governance of Telco and
Olimpia, respectively, the transfer of Telco's shares and any Olimpia Shares or
Telecom Shares (each as defined below) directly or indirectly owned by Telco and
the principles of designation, among the Investors, of candidates to be included
in a common list for the appointment of directors of Telecom Italia under the
voting list mechanism provided for by Telecom Italia's by-laws. A copy of the
Shareholders Agreement is filed as Exhibit 87.
On May 4, 2007, the Investors entered into a sale and purchase
agreement with Pirelli and the Sintonia Sellers (the "SHARE PURCHASE AGREEMENT")
to purchase the entire share capital of Olimpia of euro 4.6 billion divided into
4,630,233,510 ordinary shares (the "OLIMPIA SHARES"). Olimpia in turn owns
2,407,345,359 ordinary voting shares of Telecom Italia ("TELECOM SHARES"), or
approximately 18% of the ordinary share capital of Telecom Italia. A copy of the
Share Purchase Agreement is filed as Exhibit 90.
In summary, the result of the Sale and the Co-Investment and Purchase
and related transactions on the Sintonia Sellers' and Ragione's respective
interests in the ordinary voting shares of Telecom Italia would be as follows:
o the Sintonia Sellers would no longer hold interests in the
ordinary voting shares of Telecom Italia through a common entity
(Olimpia) with Pirelli;
o the "Shareholders Agreement" (as defined in the Schedule 13D filed
on August 9, 2001) and the "2006 Shareholders Agreement" (as
defined in Amendment No. 33 to the Schedule 13D on November 08,
2006) would be terminated;
o the Sintonia Buyer would hold approximately 8.4% of Telco and thus
remain an indirect holder of the ordinary voting shares of Telecom
Italia through Olimpia's approximately 23.6% interest therein;
o Sintonia S.p.A., through its interest in the Sintonia Buyer, and
Ragione, through its interest in Sintonia S.p.A., would likewise
remain indirect holders of ordinary voting shares of Telecom
Italia.
Items 3, 4, 5, 6 and 7 of the Statement on Schedule 13D are hereby
amended and supplemented to add the following:
ITEM 3. SOURCE AND AMOUNT OF FUNDS OR OTHER CONSIDERATION
The completion of the purchase of the Olimpia Shares is subject to the
obtaining of applicable governmental approvals, including antitrust approval of
the European Union ("EU") Commission or any EU antitrust authorities pursuant to
applicable legislation. Assuming the closing of the Share Purchase Agreement
occurs, which is currently expected to take place by the end of 2007, Telco will
pay total consideration of euro 2.82 per Telecom Share multiplied by
2,407,345,359 Telecom Shares, less Olimpia's total net debt (as defined under
the Share
(Page 6)
Purchase Agreement) as of the closing date. The provisional purchase price for
100% of Olimpia's share capital is expected to be approximately euro 4.1
billion. Telco will pay 80% of the consideration to Pirelli and 20% of the
consideration to the Sintonia Sellers. Subsequent to the purchase, it is
expected that the Investors will merge Olimpia into Telco.
Pursuant to the Co-Investment Agreement, Telco will initially be
capitalized with euro 5,145 million, in the following manner:
o Generali will contribute to Telco 543.4 million Telecom Italia Shares
for total consideration of euro 1,375 million, based on a share price
of euro 2.53 per Telecom Italia Share;
o Mediobanca will contribute to Telco 206.5 million Telecom Italia shares
for total consideration of euro 522 million, based on a share price of
euro 2.53 per Telecom Share;
o Intesa Sanpaolo will contribute to Telco euro 522 million in cash;
o the Sintonia Buyer will contribute to Telco euro 412 million in cash;
and
o Telefonica will contribute to Telco euro 2,314 million in cash.
In addition, prior to the closing of the Share Purchase Agreement,
Telco will borrow from Mediobanca, Intesa Sanpaolo or other primary financial
institutions appointed by Mediobanca and Intesa Sanpaolo, subject to written
acceptance by Telefonica, a loan (the "FACILITY") for the amount of
approximately euro 1,000 million (such Facility will be made available on an
arm's length basis). Immediately after the closing of the Share Purchase
Agreement, Telco will resolve to increase its share capital by euro 900 million
(the "FIFTH CAPITAL INCREASE") for purposes of financing the reimbursement of
the Facility. Telco shareholders look favorably on the potential for further
contributions of Telecom Italia shares in Telco (up to an amount not exceeding
30% of the ordinary share capital of Telecom Italia), provided that in such an
event the right to subscribe further capital increases in cash shall be granted
to the other existing shareholders in order to avoid possible dilution.
ITEM 4. PURPOSE OF THE TRANSACTION
The information contained in Items 5 and 6 below is incorporated herein
by reference. A copy of the joint press release, dated April 28, 2007, issued by
Pirelli and the Sintonia Sellers announcing the transaction is filed as Exhibit
91 and incorporated herein by reference.
For the Investors, the principal objective of the transaction is the
creation of value over time for all shareholders, by accompanying Telecom
Italia's business growth strategies which will be defined in full autonomy by
the Board of Directors and the management of Telecom Italia. A fundamental
assumption of the Co-Investment Agreement and the Shareholders
(Page 7)
Agreement is that the Telecom Italia and Telefonica groups will be managed
autonomously and independently. See the joint press release, dated April 28,
2007, issued by Generali, Intesa Sanpaolo, Mediobanca, the Sintonia Buyer and
Telefonica filed as Exhibit 88 and the joint press release requested by Consob
(the Italian financial market authority), dated May 2, 2007, issued by Generali,
Intesa Sanpaolo, Mediobanca, the Sintonia Buyer and Telefonica filed as Exhibit
89.
ITEM 5. INTEREST IN SECURITIES OF THE ISSUER
The proposed Share Purchase Agreement calls for the Investors to
purchase Olimpia through Telco. Olimpia currently holds 2,407,345,359 ordinary
Telecom Italia shares, or approximately 18% of the ordinary share capital of
Telecom Italia. In addition to this purchase by Telco, pursuant to the
Co-Investment Agreement, Generali and Mediobanca would contribute Telecom Italia
ordinary shares they currently own directly to Telco totaling approximately 5.6%
of Telecom Italia's ordinary share capital, bringing Telco's total participation
in Telecom Italia's ordinary share capital to 23.6%.
Pursuant to the terms of the Co-Investment Agreement, the Italian
Investors would hold a total of approximately 57.7% of Telco's share capital,
divided in the following manner:
o Generali, 28.1%;
o Mediobanca, 10.6%;
o Intesa Sanpaolo, 10.6%; and
o Sintonia Buyer, 8.4%.
Telefonica would hold the remaining 42.3% of Telco's share capital.
In connection with the Fifth Capital Increase, in accordance with the
Co-Investment Agreement and the Shareholders Agreement, Intesa Sanpaolo may
select new Italian investors, other than telecom operators, to subscribe newly
issued shares in Telco for cash consideration of up to 5% of Telco's share
capital for each new investor, provided that such selection is made in agreement
with the other Italian Investors and is accepted by Telefonica, such agreement
and acceptance not to be unreasonably withheld.
ITEM 6. CONTRACTS, ARRANGEMENTS, UNDERSTANDINGS OR RELATIONSHIPS WITH RESPECT TO
SECURITIES OF THE ISSUER
SHARE PURCHASE AGREEMENT
The following summary of certain material provisions of the Share
Purchase Agreement does not purport to be a full and complete description of
such document and is entirely qualified by reference to the full text of such
document attached as Exhibit 90 to this filing.
The Investors, Pirelli and the Sintonia Sellers have entered into the
Share Purchase Agreement to establish the terms and conditions for the transfer
of the ordinary share capital of Olimpia from Pirelli and the Sintonia Sellers
to the Investors. The Share Purchase Agreement
(Page 8)
provides, among other things, that (i) the Olimpia Shares will be purchased and
sold with the right of the Investors to receive any dividends distributed by
Olimpia after the closing of the transaction, even if accrued prior to the
closing and (ii) the completion of the purchase of the Olimpia Shares is subject
to the obtaining of applicable regulatory approvals. In addition, Pirelli and
the Sintonia Sellers have agreed that between the date of the Share Purchase
Agreement and the closing of the transactions contemplated thereby:
o Pirelli and the Sintonia Sellers will not enter into any agreement
which may affect the title or transferability of the Olimpia Shares;
o the Olimpia by-laws will not be amended;
o Olimpia will not issue any shares, pay any dividends or otherwise carry
out any extraordinary corporate transaction; and
o Olimpia will, in general, conduct its business in the ordinary course
and consistently with past practice.
The Share Purchase Agreement provides that Olimpia, Pirelli, the
Sintonia Sellers and the relevant Investors shall terminate all existing
shareholders agreements concerning Olimpia and Telecom Italia, including the
"Shareholders Agreement" (as defined in the Schedule 13D filed on August 9,
2001) and the "2006 Shareholders Agreement" (as defined in Amendment No. 33 to
the Schedule 13D on November 8, 2006), upon closing of the Sale.
The description of the Share Purchase Agreement in the Introduction and
Item 3 are incorporated herein by reference.
CO-INVESTMENT AGREEMENT
The following summary of certain material provisions of the
Co-Investment Agreement does not purport to be a full and complete description
of such document and is entirely qualified by reference to the full text of such
documents attached as Exhibit 85 to this filing.
The Investors have entered into the Co-Investment Agreement to
establish the terms and conditions for (i) their participation in Telco, (ii)
the acquisition through Telco from Pirelli and the Sintonia Sellers of 100% of
the share capital of Olimpia, which in turn holds a stake of approximately 18%
of the ordinary share capital of Telecom Italia, (iii) the capitalization and
funding of Telco in connection with the acquisition, (iv) the division of
Telco's share capital into two classes of shares ("Class A" and "Class B"
shares), (v) the corporate scope of Telco, and (vi) the general framework in
which the respective obligations of the Investors under the Co-Investment
Agreement.
The description of the Co-Investment Agreement in the Introduction and
Item 3 are incorporated herein by reference.
(Page 9)
SHAREHOLDERS' AGREEMENT
The following summary of certain material provisions of the proposed
bylaws of Telco and the Shareholders Agreement does not purport to be a full and
complete description of such documents and is entirely qualified by reference to
the full text of such documents attached as Exhibits 86 and 87 to this filing,
respectively.
CLASSES OF SHARES
The share capital of Telco will be divided into Class A and the Class B
shares. Telefonica will receive and thereafter acquire (through share capital
increases or exercise of the pre-emption right set forth in the Telco's bylaws
and as described below) only Class B shares or Class A shares to be converted
into Class B shares, while the Italian Investors will hold Class A shares, save
for the possibility to acquire Class B shares in case of exercise of the
pre-emption right to be converted into Class A shares, which is described more
fully below. Class B shares shall have exactly the same economic and
administrative rights as the Class A shares, save as provided for in the
Shareholders Agreement and in the Telco bylaws.
In the event of an increase of capital of Telco, the shareholders who
hold Class A shares shall have the right to receive and subscribe Class A shares
and the shareholders of Telco who hold Class B shares shall have the right to
receive and subscribe for Class B shares.
In the event that any holders of Class A shares have not fully
exercised their pre-emption right, the other holders of Class A shares shall
have the preferred right to exercise the pre-emption of the Class A shares that
have not been opted for by the other shareholders. Similarly, in the event that
any holders of Class B shares have not fully exercised their pre-emption right,
the other holders of Class B shares shall have the preferred right to exercise
the pre-emption of Class B shares that have not been opted for by the other
shareholders. In the event that after the offer of such Class A shares has been
made to the holders of Class A shares (whether or not such pre-emption rights
have been exercised), there remain Class A shares not purchased by the other
Class A shareholders, such shares will be offered to the holders of Class B
shares in proportion to their shareholding of the total number of Class B shares
issued by Telco, subject to the automatic conversion of the aforesaid Class A
shares at the rate of one newly issued Class B share (having the same
characteristics as the Class B shares in circulation) for each Class A share
purchased. In the event that after the offer of such Class B shares has been
made to the holders Class B shares (whether or not such pre-emption rights have
been exercised), there remain Class B shares not purchased by the other Class B
shareholders, such shares will be offered to holders of Class A shares in
proportion to their shareholding of the total number of Class A shares issued by
Telco, subject to the automatic conversion of the aforesaid Class B shares at
the rate of one newly issued Class A share (having the same characteristics as
the Class A shares in circulation) for each Class B share purchased.
SHAREHOLDERS MEETINGS
The shareholders' meeting of Telco will resolve with the vote of (i) at
least 75% of the entire share capital on (x) share capital increases with the
exclusion of the option right pursuant
(Page 10)
to article 2441, 4th and 5th paragraph of the Italian Civil Code, (y) mergers
and de-mergers (except for the merger between Olimpia and Telco) determining a
dilution of the shareholders, and (z) amendments to the provisions of the Telco
bylaws regarding the appointment of the board of directors and the quorum of
board of directors and shareholders meetings; and (ii) at least 65% of the
entire share capital on the following matters:
o any other matter pertaining to the extraordinary shareholders meeting
of Telco; and
o the dividend policy of Telco.
However, in cases where one or more shareholders hold more than 30% of
the entire share capital abstain from voting or remain absent from the relevant
meeting, the quorum will be reduced to the vote of at least 50% plus one share
of the entire share capital.
Acceptance by Telco's board of directors of any tender offers having as
their subject the shares of Telecom Italia will be subject to the approval of
the shareholders meeting. In case of any such approval, any dissenting
shareholders shall become entitled to purchase all of the shares of Telco held
by the approving shareholders.
BOARD OF DIRECTORS
Telco's bylaws will provide that its board of directors will comprise
ten members. The Italian Investors, as holders of Class A shares will be
entitled to appoint, for so long as they hold more than 50% of the share capital
of Telco, six directors, including the Chairman. Of the six Telco directors
appointed by holders of Class A shares, two directors will be indicated by
Generali, one director will be indicated by each of Intesa Sanpaolo, the
Sintonia Buyer and Mediobanca and the Chairman will be indicated unanimously.
Telefonica, as holder of Class B shares will be entitled to appoint (x) so long
as it holds a percentage of at least 30% of the share capital of Telco four
directors, including the Vice-Chairman, and (y) so long as it holds a percentage
of at least 20% of the share capital of Telco, two directors. Should (x) the
holders of Class A shares hold less than 50% plus one share, and/or (y)
Telefonica as holder of Class B shares holds more than 50% plus one share, the
Investors shall appoint the directors of Telco in a manner that grants the
majority of the directors to the class of shares representing at least 50% plus
one share of the entire share capital of Telco and seven out of ten directors to
the class of shares representing more than 70% of the entire share capital of
Telco.
The board of directors of Telco will pass resolutions by vote of a
majority of its members, except that, subject to certain exceptions, it will
decide by vote of at least seven directors on the following matters:
o the acquisition, disposal and encumbrance (directly or indirectly in
any form or manner) of Olimpia's or Telecom Italia's shares or any
rights attached thereto;
o the carrying out of investments other than in Olimpia and in Telecom
Italia;
o capital expenditure and financial structure decisions for amounts in
excess of euro 75 million;
(Page 11)
o decisions on the vote to be exercised in (x) the extraordinary
shareholders' meeting of Telecom Italia convened pursuant to Italian
law to approve resolutions on transactions of extraordinary nature and
(y) the shareholders' meeting of Olimpia; or
o approval and amendments of the budget of Telco.
DEADLOCK
The Shareholders Agreement contains provisions on the resolution of
deadlocks at the level of the board of directors and shareholders' meetings of
Telco with regard to the following matters:
a) at the level of Telco Board of Directors: (i) acquisition, disposal and
encumbrance of Olimpia or Telecom Italia's shares, (ii) decision on the
vote to be exercised in the extraordinary shareholders' meeting of Telecom
Italia to approve resolutions on transactions of extraordinary nature and
(iii) decision on the vote to be exercised in the shareholders' meeting of
Olimpia;
b) at the level of Telco shareholders' meeting, matters pertaining to the
extraordinary shareholders' meeting of Telco;
In case of deadlock with regard to the matters referred to above under
letters a) and b) the Investors shall try to find an amicable compromise failing
which a new meeting shall be convened and at such meeting the decision will be
passed with a simple majority, provided however that dissenting shareholder(s)
shall have the right to request the demerger of its stake in Telco and the pro
quota assignment of Telco assets and liabilities.
CALL OPTION
In the event that a decision to dispose, directly or indirectly, in any
form or manner (including through measures with equivalent effect, such as
mergers and demergers of Telco or Olimpia) or encumber Telecom Italia Shares or
Olimpia Shares or any rights attached thereto, including but not limited to
voting rights, is taken by the board of directors of Telco by simple majority
and Telefonica is the dissenting party, then Telefonica shall have the right to
buy from Telco or Olimpia, as the case may be, the Olimpia or Telecom Italia
Shares at the same price and conditions offered by the third party offering to
acquire such Telecom Italia Shares or Olimpia Shares or the right to proceed
with the demerger.
RESTRICTIONS ON TRANSFERS OF TELCO SHARES
Transfer of Class A and Class B shares to potential third party
acquirers, including shareholder of Telco are subject to pre-emptive rights of
the other Investors, upon the terms and conditions and pursuant to the
procedures set forth in the Shareholders Agreement.
The Shareholders Agreement contains co-sale rights whereby if one or
more Investors intend to transfer a number of shares representing more that 30%
of the aggregate share capital
(Page 12)
of Telco, the other Investors will have the right to transfer their Telco shares
in the same proportion to the purchaser.
PROVISIONS RELATING TO TELECOM ITALIA
The board of directors of Telco or Olimpia, as the case may be, shall
approve the list of candidates to be submitted to the shareholders' meeting of
Telecom Italia for the appointment of the directors of Telecom Italia pursuant
to the following criteria: (i) Telefonica, to the extent holding at least 30% of
Telco's share capital, shall have the right vis-a-vis the other Investors to
designate two directors of Telecom Italia (x) to be included as designees for
appointment in the board of Telecom Italia in the list presented by Olimpia or
Telco, as the case may be, and (y) to the extent feasible, the replacement of
directors pursuant to Article 2386, first paragraph, of the Italian Civil Code;
and (ii) the Italian Investors which are a party to the Shareholders Agreement,
to the extent holding at least 50% plus one share of Telco's share capital,
shall designate the other members of the list as follows: (x) three members
unanimously and (y) the remaining members on a proportional basis as set out in
the Shareholders Agreement.
The directors designated by Telefonica in Telco, Olimpia and Telecom
Italia shall be directed by Telefonica to neither participate, nor vote at the
board of directors meetings (and Telefonica, to the extent applicable, shall
neither attend nor vote, at any shareholders' meetings of Telco or the entity
resulting from the merger of Olimpia with Telco, as the case may be) at which
there will be discussed and proposed resolutions relating to the policies,
management, and operations of companies directly or indirectly controlled by
Telecom Italia providing their services in countries where regulatory and legal
restrictions or limitations for the exercise of voting rights by Telefonica (as
indirect and ultimate shareholder of such companies) are in force.
In the event of (i) any transfer in whatever form of any of the foreign
assets held directly or indirectly by Telecom Italia having a value of more than
euro 4 billion per transaction, or series of transactions occurring within a
period of 12 months for the same assets, or (ii) Telecom Italia entering into a
significant strategic alliance with any "Telecom Operator" (to be construed as
to include any person, company or entity operating in the telecom sector and any
person, company or entity holding (a) a controlling stake in any non-listed
company operating in the telecom sector or (b) a stake in a listed company
operating in the telecom sector which exceeds 10% of the share capital or which,
even though is below 10% of the share capital, enables the holder to appoint one
or more members of the board of directors of the listed company), then
Telefonica, within the following thirty calendar days, will have the right to
deliver notice to the other Investors, which will cause the Investors to
implement, adopt and vote, and cause their directors designated by them to
implement adopt and vote, all and any actions, documents and resolutions
necessary to complete a de-merger within a reasonably short time period, but in
any case no later than 6 months following such notice or, if the transaction is
subject to any authorizations by law or contract, within 6 months following the
obtaining of such authorizations.
The Investors agreed not to execute or take part, directly or
indirectly, in any agreement whatsoever concerning Telecom Italia shares that
may cause the holding by the Investors, Telco
(Page 13)
and their respective affiliates, taken as a whole, of a number of Telecom Italia
voting shares exceeding 30% of the total voting share capital of Telecom Italia.
TERM OF THE SHAREHOLDERS AGREEMENT
The Shareholder Agreement will last three years, at the end of which,
without prejudice to renewal, each shareholder, provided that has submitted such
request no later than 6 months prior to the expiry date, may obtain the
de-merger of its stake in Telco and the pro quota assignment of Telco assets and
liabilities. The exiting shareholder(s) shall be permitted, to the extent the
remaining shareholders decide to execute a new shareholders' agreement, to take
part to and execute such new shareholders' agreement.
ITEM 7. MATERIAL TO BE FILED AS EXHIBITS
Exhibit 85: Co-Investment Agreement, dated as of April 28, 2007, by and
among Generali, Intesa Sanpaolo, Mediobanca, the Sintonia Buyer
and Telefonica.
Exhibit 86: Draft by-laws of Telco S.p.A. (Annex C to the Co-Investment
Agreement).
Exhibit 87: Shareholders Agreement, dated as of April 28, 2007, by and
among Generali, Intesa Sanpaolo, Mediobanca, the Sintonia Buyer
and Telefonica.
Exhibit 88: Joint press release, dated April 28, 2007, issued by Generali,
Intesa Sanpaolo, Mediobanca, the Sintonia Buyer and Telefonica.
Exhibit 89: Joint press release requested by Consob (the Italian financial
market authority), dated May 2, 2007, issued by Generali,
Intesa Sanpaolo, Mediobanca, the Sintonia Buyer and Telefonica.
Exhibit 90: Share Purchase Agreement, dated May 4, 2007, by and among the
Investors, Pirelli and the Sintonia Sellers. Exhibit 91: Joint
press release, dated April 28, 2007, issued by Pirelli and the
Sintonia Sellers.
Exhibit 91: Joint press release, dated April 28, 2007, issued by Pirelli
and the Sintonia Sellers.
(Page 14)
SIGNATURE
After reasonable inquiry and to the best knowledge and belief of the
undersigned, the undersigned certifies that the information set forth in this
statement is true, complete and correct.
Date: May 8, 2007
SINTONIA S.p.A.
By: /s/ Gianni Mion
-------------------------------
Name: Gianni Mion
Title: Director
(Page 15)
SIGNATURE
After reasonable inquiry and to the best knowledge and belief of the
undersigned, the undersigned certifies that the information set forth in this
statement is true, complete and correct.
Date: May 8, 2007
SINTONIA S.A.
By: /s/ Gustave Stoffel
-------------------------------
Name: Gustave Stoffel
Title: Director
(Page 16)
SIGNATURE
After reasonable inquiry and to the best knowledge and belief of the
undersigned, the undersigned certifies that the information set forth in this
statement is true, complete and correct.
Date: May 8, 2007
RAGIONE S.a.p.a DI GILBERTO
BENETTON E C.
By: /s/ Gilberto Benetton
-------------------------------
Name: Gilberto Benetton
Title: Chairman
(Page 17)
EXHIBIT INDEX
Exhibit No.
-----------
85. Co-Investment Agreement, dated as of April 28, 2007, by and
among Generali, Intesa Sanpaolo, Mediobanca, the Sintonia Buyer
and Telefonica.85.
86. Draft by-laws of Telco S.p.A. (Annex C to the Co-Investment
Agreement).
87. Shareholders Agreement, dated as of April 28, 2007, by and among
Generali, Intesa Sanpaolo, Mediobanca, the Sintonia Buyer and
Telefonica.
88. Joint press release, dated April 28, 2007, issued by Generali,
Intesa Sanpaolo, Mediobanca, the Sintonia Buyer and Telefonica.
89. Joint press release requested by Consob (the Italian financial
market authority), dated May 2, 2007, issued by Generali, Intesa
Sanpaolo, Mediobanca, the Sintonia Buyer and Telefonica.
90. Share Purchase Agreement, dated May 4, 2007, by and among the
Investors, Pirelli and the Sintonia Sellers.
91. Joint press release, dated April 28, 2007, issued by Pirelli and
the Sintonia Sellers.
(Page 18)