It doesn’t look as if Carlo de Benedetti’s promise of a meeting with international shareholders in Ing C Olivetti & Co SpA later this month (CI No 2,990) has done anything to quell the concern over the company, and the shares tanked in a big way ye sterday, falling 5.6% in early trading on a report in Il Sole 24 Ore that chief financial officer Luciano La Noce, administrative director Corrado Ariaudo and head of investor relations Pierpaolo Cristofori have all left the company. Olivetti said it had no immediate comment on the report, but there has already been a big management shake-up earlier this year, when Corrado Passera resigned as managing director for reasons still unexplained, and Francesco Caio moved in to take his place. Il Sol e claims that there is tension between Caio and chairman and major shareholder Carlo De Benedetti over Olivetti’s ongoing restructuring plan, and it says that the company’s losses could be exacerbated by new reorganisation charges. The board of Oliv etti was due to meet late yesterday, an informed source told Reuter. The latest wave of selling of Olivetti’s shares took them close to an historic low, and has come amid market concern that the group’s first half 1996 results will be even worse tha n forecast. Olivetti is expected to release its first half 1996 results on September 26, but the company’s festering woes are underlined by the fact that it has not made a profit since 1990 as it has jumped from one hardware and systems strategy to another.
It has long been received wisdom that if Carlo de Benedetti can’t save Ing C Olivetti & Co SpA, nobody can, but that conviction is becoming a little tarnished and de Benedetti could be fighting for his corporate life – the company has not broken even since 1990. He announced at the end of last week that Olivetti will meet foreign investors this month to discuss its performance and its strategy as reports appeared that some shareholders wanted de Benedetti out. Confronted with gossip, he told Italian television he did not believe that foreign investors were so disgruntled with lacklustre progress nearly a year after a rights issue that was intended to turn Olivetti around that they wanted him to resign. I don’t get that impression, De Benedetti said. More than 70% of our shareholders are foreign. We have a custom of meeting them regularly to outline the progress and strategy of the company. There has been a recent change of management and there has been no chance for a meeting. This meeting is fixed for the end of September and it will be held normally. A group of foreign institutional investors speaking for around 25% of Olivetti’s equity met in London at the beginning of the week to discuss ways of forcing Olivetti to enhance shareholder value, Reuter reports – the shares have been in the dog house for months as the future of the personal computer business has been a matter of conjecture and rumour. One London broker, who asked not to be named, said he believed the investors were considering calling an extraordinary general meeting, which would require 20% in favour.
