October 1, 2015 / 9:01 PM / 4 years ago

Exclusive: Vivendi moves to raise Telecom Italia stake to around 19 percent - sources

MILAN/PARIS (Reuters) - France’s Vivendi (VIV.PA) has taken steps to raise its stake in Telecom Italia (TLIT.MI) to around 19 percent of the ordinary share capital, said four people familiar with the matter, in a bid to increase its influence at the group.

A logo is seen over the main entrance of the entertainment-to-telecoms conglomerate Vivendi's headquarters in Paris April 8, 2015. REUTERS/Gonzalo Fuentes

Several banks have arranged derivative contracts for Vivendi that will result in the French company led by Chairman Vincent Bollore adding to its current holdings of 15.49 percent of Telecom Italia, said one of the sources.

Two other people said Vivendi had used derivative contracts to raise its stake. A fourth person said the shares were bought on the open market but did not specify timing.

Vivendi and Telecom Italia declined to comment.

With Telecom Italia seen by sector executives and bankers as a potential takeover target, the 63-year old Breton billionaire wants to play king-maker in the coming consolidation, one of the sources said, adding France’s Orange (ORAN.PA) and Deutsche Telekom (DTEGn.DE) could be interested in a tie-up with the Italian group.

Telecom Italia’s shares have risen nearly 20 percent since the start of the year, giving it a market capitalization of 19.5 billion euros ($21.8 billion).

Vivendi became Telecom Italia’s biggest shareholder in June when it received an 8.3 percent stake as part-payment for selling Brazilian broadband group GVT to Spanish carrier Telefonica (TEF.MC).

The French company then began buying additional shares following the dissolution of the Telco investment vehicle that used to hold 22.4 percent of Telecom Italia on behalf of Telefonica and three Italian financial institutions.

The stake-building in Telecom Italia has made Bollore, Vivendi’s biggest shareholder, a major player in European telecoms again only months after the group finished selling all three of its mobile businesses.

It has also made him more influential in Italy where his Groupe Bollore (BOLL.PA) owns just under 8 percent of investment bank Mediobanca (MDBI.MI).

Vivendi could stake a claim on at least two seats on Telecom Italia’s board but has not done that yet, with its officials simply saying the group is a long-term investor in the Italian company.

Back in August, when Bollore met Italian Prime Minister Matteo Renzi, a source close to the matter said the French businessman was not seeking to dictate the Italian company’s strategy.

However, several sources said Vivendi could still add to its stake to cement control over the company.

Vivendi also sees the move as a way to expand into a promising European market, according to some of the sources, while ensuring wider distribution of content produced by subsidiaries Universal Music Group and French pay-television operator Canal Plus.

additional reporting by Paola Arosio, Valentina Za,; Stefano Rebaudo, writing by Leila Abboud and Silvia Aloisi

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