UPDATE 1-Telecom Italia rebel investor opposes sale of Brazil unit

Thursday, 5 Dec 2013 | 6:48 AM ET

(Adds details, analyst comments and share price)

MILAN, Dec 5 (Reuters) - Telecom Italia rebel investor Marco Fossati said on Thursday he was opposed to selling the company's Brazilian mobile unit TIM Participacoes to comply with an antitrust ruling.

Brazilian regulator Cade ruled on Wednesday that Telefonica , which controls Telecom Italia together with three Italian investors, must exit its stake in TIM or seek a partner for its Brazilian mobile unit Vivo.

"The solutions imposed by Cade on Telefonica mustn't damage Telecom Italia. The solution cannot and must not be the forced sale of TIM," Fossati said in a statement from his Findim holding company.

Fossati has also criticised a deal giving Telefonica the option to gradually raise its stake in the Telco vehicle that controls Telecom Italia. He is seeking to remove Telecom's board at a Dec. 20 shareholder meeting.

Shares in Telecom Italia fell more than 2 percent on Thursday following Cade's ruling.

"The timing implied by the Brazil antitrust ruling is not clear yet. But the market is probably thinking about a fast sale of TIM which means that the price they get could be less than the valuation most people have in their books," a trader said.

The Brazilian ruling and the vote on the board removal comes as Italy's biggest phone company by market share tries to revive years of sluggish growth and share underperformance while at the same time cutting its 28 billion euros of debt.

Analysts at Bernstein said in a note: "We believe Cade's decision ... will simply accelerate the timetable for a bid for TIM."

By 1105 GMT, Telecom Italia shares were down 2.2 percent at 0.67 euros.

Telecom Italia Chief Executive Marco Patuano said last month TIM was a core asset and he would consider selling it only at a "convincing" price. A source familiar with the matter has said Telecom Italia aimed to raise at least 9 billion euros from the sale of its 67 percent stake in TIM.

(Reporting by Danilo Masoni and Stephen Jewkes; Editing by Pravin Char)

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