BlackRock defends Telecom Italia investment

Investment firm BlackRock now says it holds a 7.78 percent stake in Telecom Italia and that this investment, which makes it the second largest investor in the carrier, followed Italian disclosure rules.

There is confusion in the matter because BlackRock, when it initially filed with the U.S. Securities and Exchange Commission, said it was taking a 10.14 percent stake in the firm and Italian law requires disclosure of investing parties when an investment is above 10 percent.

This caused the chairman of the Italian market regulator Consob, Guiseppe Vegas to question the investment in an interview with Italian newspaper Il Sole 24 Ore and suggest that a probe would be initiated to determine whether the investment firm acted on its own or in behalf of another company.

BlackRock then apparently backtracked a bit on the size of the stake, telling Bloomberg via e-mail that the difference in the two numbers is because "there are some bonds that are convertible to shares in Telecom Italia" but "the convertible bond held by the investment firm is not pertinent to its disclosure obligations in Italy since the shares of these bonds have not yet been issued."

BlackRock only has voting rights equal to a 7.8 percent stake, according to MarketWatch. The investment comes on the heels of another deal by Spanish operator Telefonica SA to increase its stake in a holding company that controls Telecom Italia. That holding company, Telco, owns 22.4 percent of the telecom.

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