Billionaire Niel buys Telecom Italia Stake, follows Vivendi

[MILAN] Billionaire Xavier Niel bought a 1.7 billion-euro (US$1.9 billion) stake in Telecom Italia SpA, becoming the second-largest investor after Vincent Bollore's Vivendi SA and giving the two Frenchmen more clout in reshaping strategy at one of Europe's most indebted phone companies.

Niel, the founder of broadband provider Iliad SA, holds securities giving him an 11 percent voting stake in Telecom Italia through his personal investment company, according to a filing to Italy's market regulator. Financial details weren't disclosed. Telecom Italia shares jumped as much as 11 per cent earlier on Thursday after Bloomberg reported the holding.

Together, Niel and Bollore, chairman of the owner of Universal Music Group and broadcaster Canal Plus, own about 30 per cent of Telecom Italia. Until earlier this year, Italy's largest phone company had been controlled by Spain's Telefonica SA and a group of Italian financial shareholders. Their replacement by the two French investors comes as Telecom Italia Chief Executive Officer Marco Patuano seeks to revive the company's Italian business and sell asset to reduce a debt load of almost 27 billion euros.

Telecom Italia is the biggest mobile and broadband carrier in the country of about 60 million people. It also controls Brazil's second-biggest wireless provider, Tim Participacoes SA.

Vivendi didn't ask Mr Niel, 48, to invest in Telecom Italia and isn't acting in concert with the billionaire, according to a person familiar with the matter. A representative for Vivendi declined to comment. Iliad doesn't own shares or voting rights in Telecom Italia, neither directly nor indirectly, a company representative said.

Mr Niel, with a net worth of US$7.5 billion according to the Bloomberg Billionaires Index, has invested in dozens of startups including mobile-payments company Square and music-streaming startup Deezer. He has also made personal investments in telecommunications outside France, buying Orange Switzerland last year for US$2.9 billion.

BLOOMBERG