Colaninno was expected to be elected as chairman and chief executive of Telecom Italia at Olivetti's first shareholders' meeting since securing 51.87 per cent of TI's stock on May 21.

Colaninno has control over 15 per cent of Olivetti through the Luxembourg-registered holding company Bell SA. Colaninno has sought to secure a group of Italian financial institutions, including adviser Mediobanca and Banca di Roma, to take an equal holding as a defense against unsolicited bids.

However, the Italian bank Monte dei Paschi di Siena is the only group to step forward so far by taking a 1.5 per cent stake. Insurer Generali and Fininvest, the holding company of Silvio Berlusconi, are also being courted.

The fate of the 3 percent stake in Olivetti held by Germany's Mannesmann, which bought Olivetti'sexisting telecom assets, remains uncertain, but its representative is expected to leave the Olivetti board, analysts said.

Shareholders will also decide whether to increase by as much as 3 billion euro the record-breaking 7.9 billion euro ($8.22 billion) bond planned by Olivetti subsidiary Tecnost to pay for the TI acquisition. Huge demand led to over-subscription and left some TI shareholders -- who are being paid with a mix of cash and bonds - disgruntled at their allocation.

The current size would already be the largest-ever European corporate issue. The bond will be used to pay down the massive 22.5 billion euro loan taken out by Olivetti to pay for the TI stake won despite the opposition of TI management, which had made an alliance with Deutsche Telekom in an effort to thwart Olivetti.

Olivetti shares were unchanged at 3 euros ahead of the meeting.

Bell SA to raise stake in Olivetti

Ivrea (Italy), June 9: Olivetti board member and Bell SA key investor Emilio Gnutti said on Wednesday Bellintended to raise its stake in the Italian telecom company.

Luxembourg-based financial holding Bell SA currently holds 13.91 per cent of Olivetti. Gnutti was speaking to reporters before an Olivetti shareholders' meeting, its first since winning a takeover battle for Telecom Italia.

In reply to a question about Bell's intentions, Gnutti said: ``Yes, it will increase its stake.''

Other main holders of Olivetti ordinary shares include Schroders Investment Management with 4.63 pct, Mannesmann with 3.04 pct, Intesa Asset Management with 1.96 per cent and Deutsche Boerse Clearing (DBC) with 1.74 per cent.

On Tuesday, Italy's oldest bank Monte dei Paschi di Siena (MPS) said it will take a 1.5 per cent stake in Olivetti as part of a stable core of shareholders.