* Small shareholders seeking dismissal of board on Dec. 20
* Market watchdog asks BlackRock to make clear if attending
* Telco to hold strategy meeting on Thursday
By Francesca Landini and Danilo Masoni
MILAN, Dec 14 BlackRock Inc, the world's
biggest money manager, has become the second-largest shareholder
in Telecom Italia, giving it a potentially pivotal
role in a shareholder vote on whether to oust the board of the
Italian telecoms firm.
At the end of November, it increased its combined holding in
the Italian company to 10.1 percent from the 5.1 percent it
owned in October, according to documents published by the U.S.
Securities and Exchange Commission.
In October BlackRock had said a "very attractive valuation"
was behind its decision to invest in the Italian phone company.
The increase could potentially tip the balance at the
shareholder meeting, scheduled for Dec. 20, over the future of
the phone company's board, which is in question because of
complaints of conflicts of interest and the possible sale of a
However, it is not clear how many shares the U.S. investor
will represent at the meeting since its stake in Telecom Italia
is split among several funds.
Miguel Carrasco, managing director at proxy solicitation
company Proxy Census, said BlackRock would be unlikely to bring
more than 60 percent of its stake to the shareholder meeting
because of the different investment strategies of its funds.
A source said Italy's market watchdog Consob was not
informed by BlackRock about its recent investment.
Consob has asked the U.S. group to tell the market what its
current stake in the telecoms firm is and whether it intends to
be present at the shareholders meeting, the source said, adding
the watchdog could rule for a sterilisation of voting rights on
the stake not declared.
BlackRock is required to answer before the stock trading
resumes on Monday, the source said.
A BlackRock spokesman based in London declined to comment on
The board of Telecom Italia is currently controlled by
Telco, an investment vehicle owned by Spain's Telefonica
together with Italian investors Generali,
Mediobanca and Intesa Sanpaolo.
Businessman Marco Fossati, an influential investor with a 5
percent stake in Telecom Italia, and small shareholders group
ASATI are seeking the dismissal of the board, saying it favours
the interests of core shareholders such as Telefonica.
The Spanish group owns the majority of Telco, which controls
Telecom Italia with a 22.4 percent stake, and has signed a deal
to gradually take over the holding company.
BlackRock's move and the unexpected resignations of the
representatives from Telefonica on the Telecom Italia board late
on Friday are increasing the uncertainty over the outcome of the
Telco is expected to hold a gathering on Thursday to prepare
its strategy ahead of the event.
The raising of BlackRock's stake in the Italian phone
company could be a game changer not only for the shareholder
meeting, but also for Telecom Italia's strategy regarding its
Brazilian mobile unit TIM Participacoes.
Brazilian regulator Cade has said it should be sold to solve
Rebel investor Marco Fossati said last week he was opposed
to selling the unit as it would damage Telecom Italia business,
while the company's Chief Executive Marco Patuano said last
month TIM was a core asset and he would consider selling it only
at a "convincing" price.
A source who had spoken with investors at the financial firm
said: "BlackRock favours the sale of TIM on the grounds that it
would create value for shareholders."