Telco, the company which owns 22 per cent of Telecom Italia, said in a filing with the Italian stock exchange that “there have not been contacts of any nature, not even on an informal basis, with Hutchison Whampoa group nor with Telecom Italia”, following reports that talks are underway about combining the businesses of Telecom Italia and Hutchison’s 3 in Italy.

The move came shortly after Telecom Italia issued a statement reiterating its earlier position, which is that “only preliminary non-binding contacts are taking place with Hutchison Whampoa Group, aimed at checking the feasibility of an integration process”.

Telecom Italia said that the possible alliance will be discussed at a board meeting this week, after which “information will be disseminated to the market as per the relevant rules”.

Bloomberg said that a number of shareholders will today hold a private meeting to discuss their options ahead of the official board session, with the agenda also likely to address other issues such as debt refinancing.

According to a recent Reuters report, Hutchison is “in talks to buy up to 29.9 per cent of Telecom Italia”, in a deal which would make it the largest single shareholder in the group. This has involved talks with the Telco owners, the publication said – although Telco’s own statement directly contradicts this.

It was noted that the Telco investors have lost out since their acquisition of the TI stake, and as such a deal with Hutchison would give them a way to make good some of their losses.

Reuters also linked the Hong Kong-based conglomerate with a 12 per cent share in Telecom Italia controlled by insurer Generali alongside banks Mediobanca and Intesa Sanpaolo.

Meanwhile Bloomberg said that Telefonica may also be willing to sell its 10.5 per cent indirect stake in Telecom Italia, with the Spanish and Italy-based businesses having “failed to generate synergies over the years”.

While Telefonica is looking to cut its debts, it is unlikely to want to participate in a deal that would see it taking further losses – it is believed to have lost around EUR1 billion since its 2007 investment in TI, and has already recorded associated writedowns.

Any transaction would also need support of the Italian treasury, which has veto powers over such deals.