Poste to become Telecom Italia’s No.1 investor by buying 15% from Vivendi

By Elvira Pollina and Giuseppe Fonte

MILAN (Reuters) -Poste Italiane has agreed to buy the bulk of Vivendi (OTC:VIVHY)’s stake in Telecom Italia (BIT:TLIT) to replace the French group as the main investor in the phone group with a 24.8% holding, Poste said on Saturday.

Confirming what sources had earlier told Reuters, Poste said it was buying a 15% stake in TIM from Vivendi, which had recently reduced its holding to 18.4%.

Poste said it would use available cash to fund the 684 million euro ($741 million) investment, buying shares in TIM at 0.2975 euros each.

That compares with a closing price for TIM on Friday of 0.3126, equivalent to a 4.8% discount.

Poste said it would remain below the 25% threshold above which, under Italian law, it would have to make an offer for the rest of TIM.

It added it would act as a long-term shareholder in TIM following the "strategic investment", looking for potential benefits from cooperation between the two companies and supporting sector consolidation.

State-controlled Poste, whose businesses include energy, payments and phone services as well as mail and parcels, first became an investor in TIM in February with a 9.8% stake, replacing state lender CDP.

TIM is Italy’s former phone monopoly and a business of strategic national importance.

After spinning off its fixed-line grid last year, TIM could now become involved in the consolidation expected to happen in a sector where profit margins are seen as too thin to finance the required investments.

For Rome to preserve a meaningful presence in TIM if it ties up with another telecoms firm, Poste first needed to boost its stake.

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Reuters was first to report that Poste was ready to increase its holding. Sources said earlier this week that Poste was in talks with Vivendi.

A senior Treasury official also said this week that Poste had "the right credentials" to be a leading investor in TIM because it could be both a financial and an industrial partner.

($1 = 0.9236 euros)

(Additional reporting and writing by Valentina Za.Editing by Mark Potter)

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