Xavier Niel spent €225.31 million building up his stake in Telecom Italia, according to a new SEC filing that indicates the French businessman could seek to exert some influence over the Italian incumbent’s strategy.
A series of Consob filings in recent weeks showed Niel has built up a long optional position on 15.14% of Telecom Italia’s share capital. He holds call options that are exercisable between June 2016 a nd November 2017.
The move raised questions about his motives, but the businessman has remained tight-lipped on the rationale behind the move.
A filing with the SEC on Tuesday sheds a little light on the situation, although admittedly not much.
Niel, via his NJJ Holding subsidiary’s Rock Investment unit, bought the Telecom Italia options "for strategic investment purposes," the filing reads.
As such, Niel "will routinely monitor and review a wide variety of investment considerations," including Telecom Italia’s operations, assets, prospects and business development, it notes, as well as its management and board of directors, capital structure, competitive and strategic matters, and market conditions.
The list also includes potential investment opportunities and potential strategic transactions.
Niel bought his first Telecom Italia options on 14 July this year, the filing indicates.
Vivendi, backed by fellow Frenchman Vincent Bolloré, became Telecom Italia’s biggest shareholder just a few weeks earlier, and has built up its stake since then; it now has 20.12%.
Meanwhile, earlier this week JP Morgan Chase & Co became the latest investor to disclose that it holds a significant potential stake in Telecom Italia. It holds a long position totalling 10.134% in the Italian incumbent, as of 26 November according to a statement from stock market regulator Consob on Monday.
Naturally, speculation over Telecom Italia’s future is rife. Niel in November confirmed that he is acting alone with regard to Telecom Italia and not in concert with any other party, in response to concerns expressed by Consob over possible collusion with Vivendi.
And a fortnight ago Orange denied renewed speculation that it was holding merger talks with the Italian operator.
With persistent rumours over its TIM Brasil unit – especially in lig ht of the fact that rival Oi is holding talks with investment group Letter One about the possibility of merging the two operators – Telecom Italia will be one to watch in 2016.
