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. Last Updated: 07/27/2016

Olivetti Holds Talks to Tighten Telecom Bid

MILAN, Italy -- Olivetti's board gathered Wednesday to raise cash and work to overcome a legal setback to its bid for Telecom Italia but was likely to avoid raising its $58 billion offer immediately, sources close to the deal said.

Olivetti's board, meeting for the third time in five days, was to focus on deflecting objections to its bid from bourse regulator Consob and also plans to set a capital increase expected to raise some $3 billion to fund the offer.

Protesters angry about job cuts at Olivetti's rump computer business stormed a floor of the group's Ivrea head office near Turin just as Olivetti began clearing the decks for a series of announcements after board talks in Milan - home of its telecom arm, which includes Italy's second cellular phone network, Omnitel.

Telecom Italia also piled on the pressure, telling unions its primary aim was to create shareholder value and that Telecom would "speed up" necessary changes to boost competitiveness.

A person close to the talks said Olivetti was also poised to announce a more concrete version of its preliminary deal to sell its indirect stakes in Omnitel and fixed-line network Infostrada to its German joint-venture partner Mannesmann.

That sale is a key part of Olivetti's Telecom bid and was at the center of Consob's refusal to endorse it Monday when it threw out the bid's conditions as too vague.

Mannesmann officials said the any buyout would depend on Olivetti pulling off its Telecom bid.