================================================================================
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
SCHEDULE 13D/A
(Rule 13d-101)
(Amendment No. 37)
------------------------------
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)
OCTOBER 23, 2007 AND OCTOBER 25, 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)
(Page 1 of 23)
---------------------------------------------------------- ----------------------------------------------------
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, BK
---------------------- -------------------------------------------------------------------------------------- ----------
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 8 SHARED VOTING POWER: 3,157,172,623
OWNED BY (See Item 5)
------------------- ----------------------------------------- --------------------------------
EACH 9 SOLE DISPOSITIVE POWER: 30,084,650
REPORTING
------------------- ----------------------------------------- --------------------------------
10 SHARED DISPOSITIVE POWER: 3,157,172,623
PERSON WITH (See Item 5)
---------------------- ---------------------------------------------------------------- --------------------------------
11 AGGREGATE AMOUNT BENEFICIALLY OWNED BY REPORTING PERSON: 3,187,277,273
---------------------------------------------------------------- --------------------------------
----------------------
12 CHECK BOX IF THE AGGREGATE AMOUNT IN ROW (11) EXCLUDES CERTAIN SHARES: [_]
---------------------- ---------------------------------------------------------------- --------------------------------
13 PERCENT OF CLASS REPRESENTED BY AMOUNT IN ROW (11): 23.8%
(See Item 5)
---------------------- ---------------------------------------------------------------- --------------------------------
14 TYPE OF REPORTING PERSON: CO
(Page 2 of 23)
--------------------------------------------------------- ----------------------------------------------------
CUSIP No. 87927W10 13D
--------------------------------------------------------- ----------------------------------------------------
----------------------- -----------------------------------------------------------------------------------------------
1 NAME OF REPORTING PERSON SINTONIA S.A. (FORMERLY KNOWN
I.R.S. IDENTIFICATION NO. AS EDIZIONE FINANCE INTERNATIONAL S.A.)
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, BK
----------------------- ------------------------------------------------------------------------------------ ----------
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
----------------------- ------------------------------------------------------------- ---------------------------------
NUMBER OF 7 SOLE VOTING POWER: 0
SHARES
----------------- --------------------------------------- ---------------------------------
BENEFICIALLY 8 SHARED VOTING POWER: 3,157,172,623
OWNED BY (See Item 5)
----------------- --------------------------------------- ---------------------------------
EACH 9 SOLE DISPOSITIVE POWER: 0
REPORTING
----------------- --------------------------------------- ---------------------------------
10 SHARED DISPOSITIVE POWER: 3,157,172,623
PERSON WITH (See Item 5)
----------------------- ------------------------------------------------------------- ---------------------------------
11 AGGREGATE AMOUNT BENEFICIALLY OWNED BY 3,157,172,623
REPORTING PERSON:
----------------------- ------------------------------------------------------------- ---------------------------------
12 CHECK BOX IF THE AGGREGATE AMOUNT IN ROW (11) EXCLUDES CERTAIN SHARES:
----------------------- ------------------------------------------------------------- ---------------------------------
13 PERCENT OF CLASS REPRESENTED BY AMOUNT IN ROW (11): 23.6%
(See Item 5)
----------------------- ------------------------------------------------------------- ---------------------------------
14 TYPE OF REPORTING PERSON: CO
(Page 3 of 23)
--------------------------------------------------------- ------------------------------------------------
CUSIP No. 87927W10 13D
--------------------------------------------------------- ------------------------------------------------
----------------------- -------------------------------------------------------------------------------------------
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, BK
----------------------- ------------------------------------------------------------------------------------ ------
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 8 SHARED VOTING POWER: 3,157,172,623
OWNED BY (See Item 5)
------------------ --------------------------------------- -----------------------------
EACH 9 SOLE DISPOSITIVE POWER: 30,084,650
REPORTING
------------------ --------------------------------------- -----------------------------
10 SHARED DISPOSITIVE POWER: 3,157,172,623
PERSON WITH (See Item 5)
----------------------- ------------------------------------------------------------- -----------------------------
11 AGGREGATE AMOUNT BENEFICIALLY OWNED BY REPORTING PERSON: 3,187,277,273
----------------------- ------------------------------------------------------------- -----------------------------
12 CHECK BOX IF THE AGGREGATE AMOUNT IN ROW (11) EXCLUDES
CERTAIN SHARES: [_]
----------------------- ------------------------------------------------------------- -----------------------------
13 PERCENT OF CLASS REPRESENTED BY AMOUNT IN ROW (11): 23.8%
(See Item 5)
----------------------- ------------------------------------------------------------- -----------------------------
14 TYPE OF REPORTING PERSON: PN
(Page 4 of 23)
This Amendment No. 37 (this "AMENDMENT") amends the Statement on
Schedule 13D dated August 9, 2001, as amended (as previously amended, the
"SCHEDULE 13D") filed by Edizione Holding S.p.A., a company incorporated under
the laws of the Republic of Italy, 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 ("TELECOM SHARES"), of Telecom Italia S.p.A., a company incorporated
under the laws of the Republic of Italy ("TELECOM ITALIA"). Capitalized terms
used in this Amendment without definition have the meanings ascribed to them in
the 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 the demerger of Edizione Holding S.p.A., effective on March 2, 2007, Sintonia
S.p.A. became member of a group, together with and Sintonia S.A. and Ragione,
with Pirelli & C. S.p.A. ("PIRELLI") and Olimpia S.p.A. ("OLIMPIA") with respect
to the Telecom Shares.
INTRODUCTION.
On October 25, 2007, Sintonia S.p.A. and Sintonia S.A. (together, the
"SINTONIA SELLERS") and Pirelli sold the entire share capital of Olimpia, the
entity which currently holds approximately 18% of the ordinary share capital of
Telecom Italia, to a group of investors (the "SALE"). The group of investors
that purchased the Olimpia share capital includes Sintonia S.A. (in such
capacity, the "SINTONIA BUYER"). The following summarizes the sale and purchase
of such share capital and certain agreements related thereto.
On April 28, 2007, a group of investors made up of Assicurazioni
Generali S.p.A. ("AG" and, together with the AG group companies (Alleanza
Assicurazioni S.p.A., INA Assitalia S.p.A., Volksfursorge Deutsche
Lebenversicherung A.G., Generali Vie S.A.) that became investors on October 25,
2007 pursuant to the Amendment (as defined below), "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" and, together with the Italian
Investors, the "INVESTORS"), entered into a co-investment agreement (as
subsequently amended by an amendment agreement on October 25, 2007 (the
"AMENDMENT"), 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 subsequently transformed into an Italian joint stock company and
renamed Telco S.p.A. ("TELCO"), an Italian corporation through which they have
purchased the entire share capital of Olimpia from Pirelli and the Sintonia
Sellers as indicated above (the "TRANSACTION"). The Co-Investment Agreement also
covers the capitalization and funding of Telco in connection with the
Transaction and the general framework of the investment obligations of each of
the Investors. Among other things, pursuant to the Amendment, the AG group
companies became Investors for purposes of the Co-Investment Agreement and the
Shareholders' Agreement (as hereinafter defined). In addition to Telco's
participation in Telecom Italia's ordinary share capital through its interest in
Olimpia, pursuant to the Co-Investment Agreement, on October 25, 2007 Generali
and Mediobanca
(Page 5 of 23)
contributed to Telco ordinary shares of Telecom Italia they held on that date.
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 was
previously filed on Schedule 13D as Exhibit 85 and a copy of the Amendment is
filed as Exhibit 92 hereto.
On April 28, 2007, the Investors also entered into a shareholders'
agreement (as subsequently amended by the Amendment, 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 was previously filed on Schedule 13D as Exhibit 87 and a copy of an
unofficial English translation of the by-laws of Olimpia is filed as Exhibit 93
hereto (such translation incorporates all recent amendments and amendments
described previously on Schedule 13D and therefore supercedes the prior version
filed on Schedule 13D as Exhibit 19).
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, or approximately 18% of
the ordinary share capital of Telecom Italia. A copy of the Share Purchase
Agreement was previously filed on Schedule 13D 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 is as follows:
o the Sintonia Sellers 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 Schedule 13D filed on
August 9, 2001) and the 2006 Shareholders' Agreement (as defined in
Amendment No. 33 to Schedule 13D on November 8, 2006) have been
terminated;
o the Sintonia Buyer holds approximately 8.4% of Telco and thus
remains 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., likewise remain
indirect holders of ordinary voting shares of Telecom Italia; and
(Page 6 of 23)
o in addition, Sintonia S.p.A. directly holds 30,084,650 Telecom
Shares and may be deemed to have sole power to vote or direct the
vote and sole power to dispose or direct the dispositions of such
Telecom Shares.
The closing of the purchase of the Olimpia Shares pursuant to the Share
Purchase Agreement occurred on October 25, 2007, following the receipt of the
announcement of forthcoming governmental approvals from the Brazilian antitrust
authority on October 23, 2007 (the "Announcement"), an unofficial English
translation of which is attached here as Exhibit 94. Pursuant to the Amendment,
the Investors acknowledged the content of the Announcement and each of the
Investors undertook to implement the content thereof through appropriate
actions.
Items 2, 3, 4, 5, 6 and 7 of Schedule 13D are hereby amended and
supplemented to add the following:
ITEM 2. IDENTITY AND BACKGROUND
This Amendment is being filed by each of Sintonia S.p.A., Sintonia
S.A., and Ragione.
Sintonia S.p.A., owns approximately 100% of the share capital of
Sintonia S.A., which owns directly approximately 10.62% of the equity of
Olimpia. Sintonia S.p.A. owns directly approximately 9.38% of the equity of
Olimpia (and, together with its control of Sintonia S.A., 20% of Olimpia) and
0.23% of the share capital of Telecom Italia. On September 28, 2007, Sintonia
S.p.A., GS Infrastructure Partners I (an infrastructure fund managed by Goldman
Sachs, "GSIP") and Mediobanca signed a share purchase agreement pursuant to
which GSIP and Mediobanca agreed to acquire, respectively, 3% and 1% of Sintonia
S.A. Under the terms of the transaction, GSIP and Mediobanca also agreed to
subscribe to a capital increase in Sintonia S.A. to reach fully diluted stakes
of approximately 16.3% and 5.5%, respectively. The closing of this transaction
is subject to customary regulatory approvals.
Sintonia S.p.A., through its subsidiaries and affiliates (including
Sintonia S.A.), is a holding company that manages both majority and minority
investments in publicly traded and privately owned companies. Sintonia S.p.A. is
principally engaged in the utilities and infrastructure sector. 100% of the
share capital of Sintonia S.p.A. is beneficially owned by Ragione. Ragione is a
holding company principally engaged in managing its participations in two
sub-holdings, Edizione Holding S.p.A. and Sintonia S.p.A., through which it
holds interests in companies operating in the following business areas: (i)
textiles and clothing, (ii) food and beverages, (iii) services and
infrastructures for transportation and communication, (iv) real estate and
agriculture and (v) certain other investments. The registered office of Sintonia
S.p.A. is located at Corso di Porta Vittoria 16, Milan, Italy. The registered
office of Sintonia S.A. is located at 1, Place d'Armes, Luxembourg. The
registered office of Ragione is located at Calmaggiore 23, Treviso, Italy.
The name, business address, citizenship, present principal occupation
or employment of each director and executive officer of Sintonia S.p.A.,
Sintonia S.A. and Ragione is set forth on Annexes A-1, A-2 and A-3.
(Page 7 of 23)
During the past five years, neither Sintonia S.p.A., Sintonia S.A.,
Ragione, nor any of their respective directors or executive officers has been
(i) convicted in any criminal proceeding (excluding traffic violations or
similar misdemeanors) or (ii) a party to a civil proceeding of a judicial or
administrative body of competent jurisdiction as a result of which such person
was or is subject to a judgment, decree or final order enjoining future
violations of, or prohibiting or mandating activity subject to, federal or state
securities laws or fining any violation with respect to such laws.
ITEM 3. SOURCE AND AMOUNT OF FUNDS OR OTHER CONSIDERATION
The closing of the purchase of the Olimpia Shares pursuant to the Share
Purchase Agreement occurred on October 25, 2007, following the issuance of the
Announcement on October 23, 2007. At the closing of the Share Purchase Agreement
Telco paid total consideration of euro 2.82 per Telecom Share held by Olimpia
multiplied by 2,407,345,359 Telecom Shares, less Olimpia's total net debt (as
defined under the Share Purchase Agreement) as of the closing date. The purchase
price for 100% of Olimpia's share capital was approximately euro 4.161 billion.
Telco paid 80% of the consideration to Pirelli and 20% of the consideration to
the Sintonia Sellers. It is expected that the Investors will merge Olimpia into
Telco.
Pursuant to the Co-Investment Agreement, Telco has been initially
capitalized with euro 5.145 billion, in the following manner:
o Generali contributed to Telco 543.4 million Telecom Shares for total
consideration of euro 1.375 billion, based on a share price of euro
2.53 per Telecom Share;
o Mediobanca contributed to Telco 206.5 million Telecom Shares for total
consideration of euro 522 million, based on a share price of euro 2.53
per Telecom Share;
o Intesa Sanpaolo contributed to Telco euro 522 million in cash;
o the Sintonia Buyer contributed to Telco euro 412 million in cash; and
o Telefonica contributed to Telco euro 2.314 billion in cash.
In addition, prior to the closing of the Share Purchase Agreement,
Telco borrowed from Mediobanca and Intesa Sanpaolo approximately euro 925
million (the "FACILITY"). Such Facility was made available on an arm's length
basis. Immediately after the closing of the Share Purchase Agreement, Telco
resolved to increase its share capital by euro 900 million (the "FIFTH CAPITAL
Increase") for purposes of financing the repayment of the Facility. Telco
shareholders look favorably on the potential for further contributions of
Telecom 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. See the joint press
release announcing the closing of the Transaction, dated October 25, 2007,
issued by Generali, Intesa Sanpaolo, Mediobanca, Sintonia S.A. and Telefonica
filed as Exhibit 95.
(Page 8 of 23)
ITEM 4. PURPOSE OF THE TRANSACTION
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' 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,
previously filed on Schedule 13D as Exhibit 88 and incorporated herein by
reference, 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, previously filed on
Schedule 13D as Exhibit 89 and incorporated herein by reference, and the joint
press release announcing the closing of the Transaction, dated October 25, 2007,
issued by Generali, Intesa Sanpaolo, Mediobanca, Sintonia S.A. and Telefonica
filed as Exhibit 95. In addition, the information contained in Items 5 and 6
below is incorporated herein by reference.
ITEM 5. INTEREST IN SECURITIES OF THE ISSUER
The Investors purchased Olimpia through Telco pursuant to the Share
Purchase Agreement. Olimpia currently holds 2,407,345,359 ordinary Telecom
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 contributed Telecom Shares they previously owned
directly to Telco totaling approximately 5.6% of Telecom Italia's ordinary share
capital (4.06% of which was owned by Generali, and 1.54% of which was owned by
Mediobanca), bringing Telco's total participation in Telecom Italia's ordinary
share capital to 23.6%.
As a result of the Transaction, the Italian Investors currently hold a
total of 57.7% of Telco's share capital, divided in the following manner:
o Generali, 28.0%;
o Mediobanca, 10.6%;
o Intesa Sanpaolo, 10.6%; and
o Sintonia Buyer, 8.4%.
Telefonica holds 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.
The preceding summary of certain material provisions of the Share
Purchase Agreement, the Co-Investment Agreement 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
(Page 9 of 23)
such documents previously filed as Exhibits 90, 85 and 87 to Schedule 13D,
respectively, and incorporated herein by reference.
According to publicly available information reported by Consob (the
Italian financial market authority), as of October 25, 2007, 13,380,751,344
Telecom Shares were outstanding (the "Outstanding Telecom Shares").
Sintonia S.p.A. may be deemed to beneficially own 3,187,277,273 Telecom
Shares, representing approximately 23.8% of the Outstanding Telecom Shares.
Sintonia S.p.A. directly holds 30,084,650 Telecom Shares and has sole power to
vote or direct the vote and sole power to dispose or direct the dispositions of
such Telecom Shares. Sintonia S.p.A. no longer holds its indirect interest in
Telecom Shares through Olimpia but remains an indirect holder, through its
ownership of 100% of the share capital of Sintonia S.A., of 3,157,172,623
Telecom Shares held by Telco and indirectly held by Sintonia S.A. Sintonia
S.p.A. may be deemed to have shared power to vote or to direct the vote and
shared power to dispose or direct the disposition of such shares.
Sintonia S.A. may be deemed to beneficially own 3,157,172,623 Telecom
Shares through its indirect interest in Telecom Shares held by Telco,
representing approximately 23.6% of the Outstanding Telecom Shares. Sintonia
S.A. may be deemed to have shared power to vote or direct the vote and shared
power to dispose or direct the dispositions of such Telecom Shares.
Ragione may be deemed to beneficially own, through its ownership of
100% of the share capital of Sintonia S.p.A., 3,187,277,273 Telecom Shares,
representing approximately 23.8% of the Outstanding Telecom Shares. Ragione has
sole power to vote or direct the vote and sole power to dispose or direct the
dispositions of the 30,084,650 Telecom Shares held directly by Sintonia S.p.A.
In addition, Ragione may be deemed to have shared power to vote or to direct the
vote and shared power to dispose or direct the disposition of 3,157,172,623
Telecom Shares indirectly held by Sintonia S.p.A. through Telco.
The beneficial ownership of Telecom Shares by the persons listed in
Annexes A-1, A-2 and A-3 to this Amendment, if any, is indicated next to such
person's name in such Annex . To the best of Sintonia S.p.A., Sintonia S.A. and
Ragione's knowledge, as applicable, such persons have sole voting and
dispositive power over the Telecom Shares that they beneficially own, if any.
Over the last sixty days, the persons listed in Annexes A-1, A-2 and A-3 have
not effected proprietary transactions in Telecom Shares.
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, previously filed on Schedule 13D as Exhibit 90 and incorporated herein
by reference.
(Page 10 of 23)
The Investors, Pirelli and the Sintonia Sellers 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 required, among other things, that the
Olimpia Shares 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. The Share Purchase Agreement also required
Olimpia, Pirelli, the Sintonia Sellers and the relevant Investors to terminate
all existing shareholders' agreements concerning Olimpia and Telecom Italia upon
the closing of the Sale and such existing shareholder agreements among
themselves have been terminated as of October 25, 2007.
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
document, previously filed on Schedule 13D as Exhibit 85 and incorporated herein
by reference.
The Investors 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 of 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.
SHAREHOLDERS' AGREEMENT
The following summary of certain material provisions of the by-laws 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, respectively, filed as Exhibit 96 hereto (such Exhibit
superceding the proposed by-laws of Telco previously filed on Schedule 13D as
Exhibit 86) and previously filed on Schedule 13D as 87, and incorporated herein
by reference. The 30,084,650 Telecom Shares for which the Sintonia S.p.A.
maintains sole voting power are not currently expected to be contributed to
Telco and are not generally subject to the Shareholders Agreement or the
Co-Investment Agreement, although the Shareholders' Agreement does prevent the
Sintonia Buyer from acquiring additional Telecom Shares if such acquisition
would cause the holdings of the Investors taken as a whole to exceed 30% of the
Telecom Shares. See "-PROVISIONS RELATING TO TELECOM ITALIA."
(Page 11 of 23)
CLASSES OF SHARES
The share capital of Telco is divided into Class A and the Class B
shares. Telefonica holds and will acquire (through share capital increases or
exercise of the pre-emption right set forth in the Telco's by-laws and as
described below) only Class B shares or Class A shares to be converted into
Class B shares, while the Italian Investors hold Class A shares, and have 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 will 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 by-laws.
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 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 by-laws 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
(Page 12 of 23)
o the dividend policy of Telco.
However, in cases where one or more shareholders holding 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.
In accordance with Telco's by-laws, 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
The board of directors of Telco is comprised of ten members. The
Italian Investors, as holders of Class A shares have appointed, and for so long
as they hold more than 50% of the share capital of Telco, shall be entitled to
appoint, six directors, including the Chairman. Of the six Telco directors
appointed by holders of Class A shares, two directors have been indicated by
Generali, one director has been indicated by each of Intesa Sanpaolo, the
Sintonia Buyer and Mediobanca and one director has been indicated unanimously.
Telefonica, as holder of Class B shares has appointed, and so long as it holds a
percentage of at least 30% of the share capital of Telco shall be entitled to
appoint, four directors, including the Vice-Chairman. So long as Telefonica
holds a percentage of at least 20% of the share capital of Telco, Telefonica
shall be entitled to appoint 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;
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; and
o approval and amendments of the budget of Telco.
(Page 13 of 23)
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; and
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 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 Shares at the
same price and conditions offered by the third party offering to acquire such
Telecom 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 of Telco, the other Investors, upon the terms and
conditions included thereof, 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
(Page 14 of 23)
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 Shares that may cause
the holding by the Investors, Telco 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 Shareholders' Agreement will last three years, at the end of which,
without prejudice to renewal, each shareholder, provided that it 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
(Page 15 of 23)
extent the remaining shareholders decide to execute a new shareholders'
agreement, to take part to and execute such new shareholders' agreement,
provided such existing shareholders contribute their existing shares.
AMENDMENT
Pursuant to the Amendment, the Investors acknowledged the content of
the Announcement and each of the Investors undertook to implement the content
thereof through appropriate actions. The preceding summary of certain material
provisions of the Amendment 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 filed as Exhibit 92 hereto.
ITEM 7. MATERIAL TO BE FILED AS EXHIBITS
Exhibit 92: Amendment to the Co-Investment Agreement and the Shareholders'
Agreement, dated October 25, 2007, by and among Generali,
Intesa Sanpaolo, Mediobanca, Sintonia S.A. and Telefonica.
Exhibit 93: By-laws of Olimpia S.p.A. (unofficial English translation).
Exhibit 94: The Announcement of the Board of Commissioners of the
Brazilian National Telecommunications Agency (Anatel) related
to the Transaction, dated October 23, 2007 (unofficial English
translation).
Exhibit 95: Joint Press Release announcing the closing of the
Transaction, dated October 25, 2007, issued by Generali, Intesa
Sanpaolo, Mediobanca, Sintonia S.A. and Telefonica.
Exhibit 96: By-laws of Telco S.p.A. (unofficial English translation).
(Page 16 of 23)
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: October 31, 2007
SINTONIA S.p.A.
By: /s/ Gianni Mion
-------------------------
Name: Gianni Mion
Title: Director
(Page 17 of 23)
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: October 31, 2007
SINTONIA S.A.
By: /s/ Gustave Stoffel
-------------------------
Name: Gustave Stoffel
Title: Director
(Page 18 of 23)
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: October 31, 2007
RAGIONE S.a.p.a DI GILBERTO
BENETTON E C.
By: /s/ Gilberto Benetton
-------------------------
Name: Gilberto Benetton
Title: Chairman
(Page 19 of 23)
ANNEX A-1
DIRECTORS AND EXECUTIVE OFFICERS OF SINTONIA S.P.A.
The name, title, present principal occupation or employment of each of the
directors and executive officers of Sintonia S.p.A. are set forth below. The
business address of each director and executive officer is Sintonia S.p.A.'s
address. Unless otherwise indicated, each occupation set forth opposite an
individual's name refers to Sintonia S.p.A. Unless otherwise indicated below,
all of the persons listed below are citizens of the Republic of Italy.
==========================================================================================================
PRESENT PRINCIPAL OCCUPATION
NAME AND POSITION WITH (IF DIFFERENT FROM POSITION WITH TELECOM SHARES
SURNAME SINTONIA S.P.A. SINTONIA S.P.A.) BENEFICIALLY OWNED
==========================================================================================================
Gilberto Benetton Chairman Executive 1,946,250
==========================================================================================================
Gianni Mion Managing Director Executive 27,000
==========================================================================================================
Sergio Simoi Director Consultant -
==========================================================================================================
(Page 20 of 23)
ANNEX A-2
DIRECTORS AND EXECUTIVE OFFICERS OF SINTONIA S.A.
The name, title, present principal occupation or employment of each of the
directors and executive officers of Sintonia S.A. are set forth below. The
business address of each director and executive officer is Sintonia S.A.'s
address. Unless otherwise indicated, each occupation set forth opposite an
individual's name refers to Sintonia S.A. Unless otherwise indicated below, all
of the persons listed below are citizens of the Republic of Italy.
===================================================================================================================
PRESENT PRINCIPAL
OCCUPATION
NAME AND SURNAME POSITION WITH (IF DIFFERENT FROM CITIZENSHIP IF TELECOM SHARES
SINTONIA S.A. POSITION WITH OTHER THAN BENEFICIALLY OWNED
SINTONIA S.A.) ITALIAN
===================================================================================================================
Jean Hoss Chairman Lawyer Luxembourg -
===================================================================================================================
Carlo Bertazzo Director Manager -
===================================================================================================================
Sergio De Simoi Director Consultant -
===================================================================================================================
Giancarlo Olgiati Director Lawyer Swiss -
===================================================================================================================
Gianni Mion Director Executive 27,000
===================================================================================================================
Roberto Savini Director Consultant -
===================================================================================================================
Gustave Stoffel Director Luxembourg -
===================================================================================================================
Alex Sulkowski Director Consultant Luxembourg -
===================================================================================================================
(Page 21 of 23)
ANNEX A-3
DIRECTORS AND EXECUTIVE OFFICERS OF RAGIONE
The name, title, present principal occupation or employment of each of the
directors and executive officers of Ragione are set forth below. The business
address of each director and executive officer is Ragione's address. Unless
otherwise indicated, each occupation set forth opposite an individual's name
refers to Ragione. Unless otherwise indicated below, all of the persons listed
below are citizens of the Republic of Italy.
===================================================================================================================
NAME AND PRESENT PRINCIPAL OCCUPATION TELECOM SHARES
SURNAME POSITION WITH RAGIONE (IF DIFFERENT FROM POSITION WITH RAGIONE) BENEFICIALLY OWNED
===================================================================================================================
Gilberto Benetton Chairman Executive 1,946,250
===================================================================================================================
Carlo Benetton Deputy Chairman Executive -
===================================================================================================================
Luciano Benetton General Partner Executive -
===================================================================================================================
Giuliana Benetton General Partner Executive -
===================================================================================================================
(Page 22 of 23)
EXHIBIT INDEX
EXHIBIT NO.
-----------
99.85 Co-Investment Agreement, dated as of April 28, 2007, by and
among Generali, Intesa Sanpaolo, Mediobanca, the Sintonia Buyer
and Telefonica.*
99.86 Draft by-laws of Telco S.p.A. (Annex C to the Co-Investment
Agreement).*
99.87 Shareholders' Agreement, dated as of April 28, 2007, by and
among Generali, Intesa Sanpaolo, Mediobanca, the Sintonia Buyer
and Telefonica.*
99.88 Joint press release, dated April 28, 2007, issued by Generali,
Intesa Sanpaolo, Mediobanca, the Sintonia Buyer and Telefonica.*
99.89 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.*
99.90 Share Purchase Agreement, dated May 4, 2007, by and among the
Investors, Pirelli and the Sintonia Sellers.*
99.91 Joint press release, dated April 28, 2007, issued by Pirelli and
the Sintonia Sellers.*
99.92 Amendment to the Co-Investment Agreement and the Shareholders'
Agreement, dated October 25, 2007, by and among Generali, Intesa
Sanpaolo, Mediobanca, Sintonia S.A. and Telefonica.
99.93 By-laws of Olimpia S.p.A. (unofficial English translation).
99.94 The Announcement of the Board of Commissioners of the Brazilian
National Telecommunications Agency (Anatel) related to the
Transaction, dated October 23, 2007 (unofficial English
translation).
99.95 Joint Press Release announcing the closing of the Transaction,
dated October 25, 2007, issued by Generali, Intesa Sanpaolo,
Mediobanca, Sintonia S.A. and Telefonica.
99.96 By-laws of Telco S.p.A. (unofficial English translation).
* Previously filed.
(Page 23 of 23)