(Associated Press via NewsEdge) AT&T said it was pulling out of talks to potentially buy a one-third stake in the Olimpia holding company, which controls Telecom Italia.
AT&T's statement, saying it had 'decided not to pursue the matter further,' was released as Telecom Italia shareholders met to elect a new board.
Olimpia started negotiations with AT&T and a Mexican affiliate, America Movil, earlier this month to sell a two-thirds stake in Olimpia, with the option to sell the remaining third after a year.
In Mexico City, America Movil said that 'after the withdrawal' by AT&T it will continue considering 'different alternatives for a potential investment in Olimpia.'
Pirelli & C SpA, one of Olimpia's owners, said in a statement that AT&T's withdrawal was 'motivated by the possible regulatory difficulties connected with the operation.'
While taking note of America Movil's statement, Pirelli said it was reiterating 'the intention to explore all possible options for the best strategic valuation of the asset in the interest of all the shareholders and to continue, in the meantime, to operate so that Olimpia continues to fully exercise its rights and duties as shareholder of Telecom Italia.'
The negotiations have raised concerns in Rome about a strategic national asset falling into the hands of foreigners, and the media have speculated about arrangements that would allow the company to remain in Italian hands.
Fueling the speculation, the chief executive of Intesa Sanpaolo SpA, Italy's largest bank, said it may consider taking a stake.
'We might consider a shareholding participation if this looks like a good idea for us and our shareholders,' Intesa Sanpaolo's Corrado Passera said during an analyst presentation, noting that the bank has in the past made temporary investments.
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