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Minority Expropriation and Shareholder Activism Following Olivetti’s Hostile Takeover of Telecom Italia

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  • Timothy A. Kruse

Abstract

I examine the treatment of minority shareholders and shareholder activism following Olivetti’s successful hostile acquisition of a majority stake in Telecom Italia in 1999. Overall, the evidence is mixed. While Olivetti pursued several operations perceived to be detrimental to Telecom Italia’s minority shareholders, they were atypically vigorous in fighting back. In several cases, Olivetti was forced to abandon or improve the terms of the operations. While Telecom Italia was vulnerable to a hostile takeover attack following its privatisation, the concentration of ownership of listed companies ensures that hostile takeovers will remain rare. Moreover, low participation rates at annual meetings among small investors serves to enhance the power of the controlling blocks.

Suggested Citation

  • Timothy A. Kruse, 2007. "Minority Expropriation and Shareholder Activism Following Olivetti’s Hostile Takeover of Telecom Italia," Corporate Governance: An International Review, Wiley Blackwell, vol. 15(2), pages 133-143, March.
    • Handle: RePEc:bla:corgov:v:15:y:2007:i:2:p:133-143
    DOI: 10.1111/j.1467-8683.2007.00550.x
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    1. Andrea Melis, 2000. "Corporate Governance in Italy," Corporate Governance: An International Review, Wiley Blackwell, vol. 8(4), pages 347-355, October.
    2. Paolo Santella & Giulia Paone & Carlo Drago, "undated". "How Independent Are Independent Directors? The Case Of Italy," German Working Papers in Law and Economics 2006-1-1148, Berkeley Electronic Press.
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    Cited by:

    1. Andrea Melis & Silvia Carta & Silvia Gaia, 2012. "Executive remuneration in blockholder-dominated firms. How do Italian firms use stock options?," Journal of Management & Governance, Springer;Accademia Italiana di Economia Aziendale (AIDEA), vol. 16(3), pages 511-541, August.
    2. Siti Sakinah Azizan & Rashid Ameer, 2012. "Shareholder activism in family-controlled firms in Malaysia," Managerial Auditing Journal, Emerald Group Publishing, vol. 27(8), pages 774-794, August.
    3. Michele Meoli & Stefano Paleari & Giovanni Urga, 2008. "Controlling shareholders and minority protection: governance lessons from the case of Telecom Italia," Working Papers 0808, Department of Management, Information and Production Engineering, University of Bergamo.
    4. Sunita Upendra Sharma, 2016. "A Study of Small Shareholders’ Attitude towards Small-shareholder Activism," Indian Journal of Corporate Governance, , vol. 9(1), pages 67-82, June.
    5. Mauricio Jara‐Bertin & Félix J. López‐Iturriaga & Óscar López‐de‐Foronda, 2008. "The Contest to the Control in European Family Firms: How Other Shareholders Affect Firm Value," Corporate Governance: An International Review, Wiley Blackwell, vol. 16(3), pages 146-159, May.

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