Vivendi ups Telecom Italia stake to just below bid threshold

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Vivendi previously had 23.8 percent of the Italian phone group, and has now more than tripled its holding in less than a year as it stamps its authority on the company. Sources say it is not expected to buy more, at least in the short term, because owning 24.9 percent gives it de-facto control of the company as the largest shareholder without having the expense of taking it over.

A filing to the Securities and Exchange Commission said Vivendi had bought more Telecom Italia shares on the market between March 1-9. A source close to the situation said that investment bank Mediobanca (MDBI.MI), of which Vivendi Chairman Vincent Bollore is an influential investor, bought the shares on behalf of the French group.

Vivendi, which has four seats on Telecom Italia's 17-member board, declined to comment.

The stake increase will add to feverish market speculation about Vivendi's long-term plan for Telecom Italia.

Over the past 10 days media reports have said that Vivendi was growing impatient with Telecom Italia's CEO Marco Patuano and was sounding out possible candidates to replace him.

This week, shares in Telecom Italia rose sharply after the CEO of Orange said that he would look into the idea of a merger deal with the Italian group if Bollore asked him to. Italian Prime Minister Matteo Renzi and French President Francois Hollande weighed in, saying they wanted to create major companies that can compete in Europe.

Meanwhile, reports that Vivendi was nearing an agreement to buy Mediaset's (MS.MI) pay-TV unit have also rekindled talk of a wider deal that might involve Telecom Italia.

However, the chairman of the former Italian monopoly, Giuseppe Recchi, said on Friday a merger with Orange was a "fantasy by the press", and a tie-up with Mediaset was "not on the table."

(Reporting by Silvia Aloisi; Editing by Susan Fenton)