(Bloomberg) -- Investment firm Davide Leone & Partners bought about 10% of Telecom Italia SpA’s preferred shares, a sign of confidence in the phone carrier’s turnaround plan.
The so-called savings shares confer higher dividends but no voting rights. Telecom Italia hasn’t paid a dividend since 2021, when it distributed 1 euro cent per ordinary share and 2.75 euro cents for saving shares. If the carrier returns to profitability, it will be required by local law to pay dividend arrears for savings shares.
Davide Leone supports Chief Executive Officer Pietro Labriola’s plan to streamline Telecom Italia, and expects the dividend to be restored in due course, people familiar with the matter said, asking not to be identified discussing private business matters.
The Rome-based company has been struggling for years to cut debt and adapt to an increasingly competitive market. As part of a turnaround plan it’s been selling off assets, including the blockbuster sale of its landline network to US private equity firm KKR & Co.
At Monday’s closing price, a 10% stake of Telecom Italia saving shares is valued at about €170 million ($189 million).
A representative for Davide Leone confirmed it had bought the stake but declined to provide any other details. A spokesperson for Telecom Italia declined to comment.
Former state monopoly Telecom Italia completed the deal to sell its grid to KKR in July, valuing the asset at as much as €22 billion, including about €3 billion in earn-outs.
Davide Leone founded his investment firm in 2011 after working for Farallon Capital Management in San Francisco and London. He previously worked as a trader and financial analyst, his spokesperson said.
Separately, the investor took an indirect 5.5% stake in Italian lender Banco BPM SpA, according to a Milan stock exchange filing this month.
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