Iliad founder Xavier Niel has bought 11.2% of Telecom Italia, becoming the incumbent’s second prominent French investor alongside Vivendi, backed by billionaire Vincent Bolloré, which recently raised its stake to 19.9%.
French telecoms investor Xavier Niel has bought around 11.2% of Telecom Italia (BIT:TIT) according to Italian securities and exchange commission Consob.
Niel, who founded French challenger Iliad (EPA:ILD), has acquired the stake in a personal capacity and becomes Telecom Italia’s second prominent French investor after Vivendi, backed by billionaire Vincent Bolloré, which recently raised its stake to 19.9%.
Reports suggest Niel acquired 6% and holds another 5% through derivative contracts.
Niel and Telecom Italia declined to comment further on the stake acquisition.
The Italian giant’s shares rocketed 7% on the back of the news to give it a market capitalisation of around €24bn (US$26.2bn), which would value Niel’s potential 11% holding at €2.64bn (US$2.89bn).
Niel’s moves comes less than a year after his private holding company NJJ Capital bought Orange Switzerland for SFr2.8bn (US$2.9bn) from Apax Partners. That followed an ambitious yet unsuccessful
Vivendi entered the shareholding of Telecom Italia earlier this year, first with 8.24% via a share exchange as part of its exit from Brazilian fixed-line player GVT, and then acquired another 6.66% by buying shares on the market.
Observers are split over whether Vivendi views Telecom Italia as a distribution platform for its content, or whether its chairman Vincent Bolloré is simply acting as an activist investor in a company long seen as a takeover target.
“Bolloré has a strong track record in Italy [as the second largest investor in Mediobanca], so it makes sense for him to work more closely with Telecom Italia. I think he’ll do it smoothly, but he’ll be making the strategic decisions. He’ll just need to be careful not to be too obvious, so he doesn’t upset the government,” one adviser said.
Domestically, Telecom Italia is focused on improving Italy’s fixed-line network and is considering a renewed bid for dark fibre operator Metroweb. Further afield it is waiting to see what Letter One proposes as the Russian investor is looking to merge Oi with Telecom Italia’s subsidiary TIM Brasil. Meanwhile, it recently suffered a setback in Argentina after the government blocked its sale of Telecom Argentina.