Davide Leone and Partners buys 10% of Telecom Italia savings shares
Updates with share price in paragraph 4, background in 5-7, quote 12-13, graphics
MILAN, Sept 17 (Reuters) -London-based investment fund Davide Leone and Partners (DL&P) said it had bought Telecom Italia (TIM) TLITn.MI savings shares and currently owned 10% of the total, eyeing a potential return to dividend payments.
The stake was unveiled late on Monday when a representative for the fund confirmed market rumours that Davide Leone, an Italian financier whose fund is a major shareholder in bank Banco BPM BAMI.MI, had been snapping up TIM savings shares.
The fund's stake was worth around 170 million euros ($189.13 million) at Monday's closing price TLIT.MI.
TIM's saving shares, which represent about 30% of TIM's market capitalisation, rose as much as 3% to 0.2874 euros on Tuesday.
TIM's saving shares command a minimum dividend of 2.75 cents a share, which implies a 166 million euro yearly payment for TIM.
But the company, whose earnings and finances have been under pressure for years, has suspended any payments to shareholders, including those holding savings shares, since 2021.
Leone was quoted as saying by Italian daily La Repubblica on Tuesday that investors in savings shares had been penalised but that he saw the potential for a return to dividend from the company.
"If the outlook improves, then savings shareholders are entitled to take the dividend, including the dividend accumulated over the last three years," Leone was quoted as saying by La Repubblica.
Leone sees upside in the telecoms company's business prospects.
He cited a 2.9 billion euro potential future payment linked the sale of its fixed-line network and a potential 1 billion euro cash-in deriving from a legal case against the Italian government.
In the past, TIM repeatedly sought to ditch the dual share system, converting saving shares into ordinary stocks but attempt to win required backing from ordinary shareholders proved unsuccessful.
Any new proposal to convert savings shares would mean "issuing new ordinary shares at a very low price and would be not be consistent with TIM's management view that TIM's stock is undervalued," the financier was quoted as saying.
($1 = 0.8989 euros)
TELECOM ITALIA https://tmsnrt.rs/3XPaMxq
Reporting by Elvira Pollina and Valentina Za, additional reporting by Giulia Segreti; graphics by Sara Rossi, editing by Savio D'Souza and David Evans
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