News
French businessman offloads much of his long, optional position in Italian incumbent in line with commitments made in Iliad’s 3 Italia/Wind assets deal.
Xavier Niel has reduced his potential stake in Telecom Italia, in line with his commitment to do so a fortnight ago when his Iliad unit agreed to acquire assets to enable it to become a mobile network operator in Italy.
The French businessman spent over €225 million building up a long optional position on 15.14% of Telecom Italia’s share capital last year, triggering endless speculation over his intentions towards the Italian incumbent.
As of 14 July, his Rock Investment unit has reduced its position to a possible 6.954%, comprising 6.887% in potential participation and 0.067% in other long positions to be settled in cash, according to a filing published on Tuesday by Italian financial markets regulator Consob.
The announcement comes after Iliad revealed that it has agreed to acquire a portfolio of assets from CK Hutchison’s 3 Italia and VimpelCom’s Wind in the event of their merger. Hutch and VimpelCom agreed to merge their Italian businesses via a €21.8 billion deal almost a year ago and are now waiting for the green light from the European Commission, which many expect to come imminently.
The assets in question comprise spectrum and mobile base stations sufficient to enable Iliad to launch as a new mobile network operator in Italy, allowing the market to retain four facilities-based competitors, something which appears to be key to gaining the approval of the European Commission’s competition body. The deal it has brokered with Hutchison and VimpelCom also includes an agreement to roam on the merged entity’s 2G, 3G and 4G networks.
Niel is Iliad’s majority shareholder. When the French telco announced the Italian deal, it confirmed that Niel did not hold any stake in Telecom Italia’s voting rights or capital, either directly or indirectly, and would sell what amounted to a "marginal financial interest" in the company in a matter of weeks.
"[Niel] fully supports Iliad’s operation to create a new mobile network operator in Italy," the firm said.
