* Iliad founder Niel ups stake to over 15 pct of voting rights
* Stake held through call option contracts and other positions
* Telecom Italia shares hit highest since 2008 (Adds source saying Italy antitrust want to see board minutes, para 8)
MILAN, Oct 30 (Reuters) – French telecoms tycoon Xavier Niel has increased his stake in Telecom Italia to just over 15 percent of the voting rights, strengthening his position as the carrier’s second-largest shareholder and catching up on top investor Vivendi.
While Niel has not publicly stated his intentions, his arrival means fellow billionaire Vincent Bollore, the largest shareholder in Vivendi, will have to take him into account as Vivendi seeks to influence Telecom Italia’s future.
Shares in Telecom Italia touched a seven-year high on Friday, extending sharp gains from the previous day, before paring some gains to close up 0.6 percent.
Niel, 48-year-old founder of low-cost French mobile operator Iliad, on Tuesday raised his holding to the equivalent of a 15.143 percent voting stake, a filing from Italian market regulator Consob showed on Friday. The stake is held through call option contracts and other positions.
The filing came a day after Niel disclosed a position that amounted to 11.2 percent.
The Italian government said any changes among shareholders had to comply with market rules.
“The country’s best interest is that any changes among shareholders … meet the goal of strengthening industrially a company, such as Telecom Italia, which is strategic for the development of Italy’s telecommunications system,” said Claudio De Vincenti, chief of staff of Prime Minister Matteo Renzi.
A source said Italy’s antitrust authority had asked Niel to show them board minutes regarding his purchases, adding that the move could lead to a joint probe with EU authorities.
People close to Vivendi said the company was surprised by Niel’s moves and were evaluating its next steps, including adding to its stake. Telecom Italia said it had no comment.
Some analysts saw Niel’s arrival as a speculative move rather than part of a broader industrial strategy, adding it was still positive for Telecom Italia’s share price.
France’s Economy Minister Emmanuel Macron said on Friday after a meeting with French telecom operators that he did not see Niel’s investment in Telecom Italia as hostile but he cheered “the dynamism of French entrepreneurs and their international ambitions since they are good for the country”.
Telecom Italia, which has outstanding debts of 30 billion euros ($ 33 bln), according to Reuters data, has been seen by bankers and sector executives as a potential takeover target in a consolidating sector, partly because of its relatively small size. It is present only in its home market and Brazil, and offers untapped potential in Italy, where it faces no competition from cable operators.
It remains to be seen how Niel’s investment will be received by Rome, which has to date welcomed Vivendi’s presence at Telecom Italia. Bollore is well known in Italian business and political circles, since he has been a long-time shareholder of influential investment bank Mediobanca.
Although not a direct shareholder in Telecom Italia, the Italian government could intervene if it sees developments at the company as threats to national interests.
Both Italy and France are looking to build up national champions capable of competing globally.
In March, French state-backed carrier Orange called Telecom Italia an “attractive European consolidation opportunity”, floating the idea of a tie-up, before admitting no talks had occurred.
While both Niel and Vivendi could further raise their stakes, analysts exclude the possibility that either would go beyond 25 percent, as under local rules that would force them to bid for the whole company.
Consob is already looking into whether the two were acting in concert, as any evidence of them doing so would trigger a mandatory offer. ($ 1 = 0.9079 euros) (Additional reporting by Leila Abboud, Gregory Blachier, Claudia Cristoferi and Alberto Sisto; Editing by Susan Fenton and William Hardy)