Telecom Italia's ultimate ownership has changed twice in four years

Telecom Italia (TI) was bought - thanks to massive loans - by office equipment firm Olivetti in 1999, which itself was bought by a consortium led by tyre firm Pirelli two years later.

Now Olivetti wants to turn every Telecom Italia shares into seven of its own shares, a return which some TI shareholders say is not enough.

Deninor, a shareholder rights group which says it represents investors owning 8% of TI, said it will take any measure including court action to block the 9bn euro takeover.

"The fundamental problem with the deal is that there is no logic to justify it for TI shareholders," Umberto Mosetti, Deninor's Italian spokesman, told reporters.

The ratio of shares, he said, "should be at least nine, more than 10 and closer to 20".

Simplified

Olivetti needs backing from holders of two-thirds of the shares to get the merger approved.

With 55% of TI in Olivetti's hands already, it can get the deal through with the backing of only a small minority of other shareholders.

The aim of the deal is to simplify the complex ownership structure surrounding the two companies and the group which in turn controls Olivetti.