GREECE agreed to sell 3 percent of Hellenic Telecommunications Organization SA to Deutsche Telekom AG as part of talks to hand over management control of Greece's former phone monopoly, known as OTE.

"We'll sell 3 percent, and we'll have the option to sell more shares in the coming years," Economy Minister George Alogoskoufis said in an interview on state-run television channel Net. Greece wants more than 26 euros a share for the stake, he said. OTE shares rose 1.5 percent to 19.40 euros on Friday, valuing the company at 9.5 billion euros (US$14.7 billion).

Greece, OTE's biggest shareholder with 28 percent, and Deutsche Telekom have until Wednesday to reach agreement on the purchase. Bonn-based Deutsche Telekom said on March 17 it will buy 20 percent of OTE from Marfin Investment Group SA for 2.5 billion euros if it gets government approval for management control, Bloomberg News said.

Deutsche Telekom, Europe's biggest phone company, will appoint OTE's chief executive officer and the Greek government will name the chairman, Alogoskoufis said. Greece will have the right to reject as many as three of Deutsche Telekom's candidates for CEO. Hellenic will keep its current name, Alogoskoufis said.

Negotiations continue about the degree of Greece's veto rights over OTE's management and on the price for 3-percent stake and future disposals. The minister denied press reports that the government agreed to sell the stake at 28 euros a share.