* SEC says BlackRock raised Telecom Italia stake to 10.1 pct
* Italy's market watchdog threatens to fine U.S. investor
* BlackRock will disclose stake on Monday, source says
* Telecom Italia's EGM to vote on ousting board on Dec. 20
By Francesca Landini
MILAN, Dec 16 BlackRock Inc will have to
say on Monday what stake it holds in Italy's biggest telecom
operator Telecom Italia, after the Italian market
watchdog threatened to fine it for not disclosing an increase.
At the end of November, the world's largest money manager
lifted its combined holding in the phone company to 10.1 percent
from the 5.1 percent it held in October, according to filings it
made to the U.S. Securities and Exchange Commission (SEC).
Crossing the 10 percent threshold obliges the company to
notify regulators, according to Italian market rules.
If confirmed, the 10.1 stake would make BlackRock the second
biggest shareholder in Telecom Italia by far after holding
company Telco, and give it a potentially pivotal role in
Friday's shareholder vote on whether to oust the board of the
BlackRock informed the SEC at the beginning of December, but
it did not tell Italian market watchdog Consob within a five-day
deadline from the stake increase as required, the watchdog's
chief said on Sunday.
"Our immediate reaction is the sanction procedure; we can
impose a fine of a maximum 500,000 euros ($700,000)," Consob
head Giuseppe Vegas told daily Il Sole 24 Ore on Sunday.
The Italian regulator has told the U.S. group to make a
statement on the size of its holding ahead of the Italian market
opening on Monday and on what its intentions are at the
shareholder meeting, Vegas told the newspaper.
A source familiar with the matter said BlackRock was still
in compliance with Italian law, as its stake only exceeded the
10 percent threshold if Telecom Italia convertible bonds the
investor bought were included, and such bonds do not count as
equity holdings outside the United States.
The U.S. investor will clarify the details of its holding on
Monday, the source added. BlackRock declined to comment on
According to Vegas, BlackRock had bought 3.56 percent in
Telecom Italia between Oct. 2 and Dec. 13. It was not clear if
this was on top of the 10.1 percent stake communicated to the
SEC or of the 5.1 percent holding disclosed to Italian
authorities in October.
Consob is also trying to ascertain whether BlackRock acted
on its own, or in agreement with other parties, including
The Spanish group owns the majority of Telco, a holding
company which controls Telecom Italia with a 22.4 percent stake.
Italian banks Mediobanca and Intesa Sanpaolo,
and insurer Generali are also investors in Telco.
BlackRock's investment would allow it to overtake rebel
Italian businessman Marco Fossati, who owns 5 percent.
The size of BlackRock's holding and any possible dealings
with Telefonica are crucial because Italian legislation forces
any investor or alliance buying a 30 percent stake in a company
to launch a mandatory takeover offer on minority holdings.
The BlackRock stake increase could also potentially tip the
balance at the shareholder meeting over the future of the phone
company's board, which is in question because of complaints of a
conflict of interest and the possible sale of its prized
Brazilian unit TIM Participações SA.
Fossati and small shareholders group ASATI are seeking the
dismissal of the board, saying it favours the interests of core
shareholders such as Telefonica, which has a deal to gradually
take over the holding company from its Italian investors.
Telco is expected to hold talks on Thursday to prepare its
strategy ahead of the shareholder vote.
Consob has asked Telecom Italia to make a statement on when
it was informed by BlackRock about its investment and said Telco
should give explanations regarding its candidates should the
current board be revoked.