(Bloomberg) -- CVC Capital Partners Plc is exploring a potential purchase of Vivendi SE’s stake in Telecom Italia SpA, people with knowledge of the matter said, which could pave the way for a potential takeover of Italy’s biggest telecommunications company. 

The private equity firm has been holding preliminary talks with Vivendi about buying its 24% holding in the Italian carrier’s common shares, the people said, asking not to be identified because the information is private. The stake is currently valued at about €950 million ($996 million), according to data compiled by Bloomberg. 

Telecom Italia gained as much as 5.4% in Milan trading, giving the company a market value of about €6.1 billion. 

A successful deal would make CVC the carrier’s biggest shareholder. The buyout firm may eventually seek a full takeover of Telecom Italia and try to break up the business, some of the people said. In addition to Telecom Italia’s core wireless business in Italy, it also has other operations including an enterprise services arm and a listed Brazilian unit with a market value of about $6.1 billion. 

Telecom Italia shares have fallen 12% this year, giving the company a market value of about €5.8 billion. Discussions are at an early stage and there’s no certainty they will result in a deal, the people said. Vivendi’s stake in Telecom Italia could also attract interest from other suitors, the people said. 

Representatives for CVC, Vivendi and Telecom Italia declined to comment. 

Vivendi has been working with advisers to explore options including a sale of the Telecom Italia stake, as billionaire Vincent Bolloré reorganizes the company he controls, Bloomberg News reported last year. The French conglomerate this week spun off three multibillion-euro units, and the remainder of the group continues to trade in Paris, with assets including the Telecom Italia stake.

CVC has in the past weighed other moves on assets owned by Telecom Italia. The Italian firm in 2022 rejected CVC’s non-binding bid for a minority stake in its new enterprise services unit. That offer valued the business at €6 billion, which the carrier deemed too low, people familiar with the matter said at the time. 

In July of this year, Telecom Italia completed the sale of its fixed-line network to US private equity firm KKR & Co. in a deal that valued the grid at as much as €22 billion. The sale of its most valuable asset has freed Telecom Italia to slim down and slash its debt in order to better compete in one of the world’s toughest telecoms markets.

Any takeover would likely need the blessing of the Italian government, which owns a stake in Telecom Italia through state-backed lender Cassa Depositi e Prestiti SpA and has veto powers on any takeover operation involving foreign buyers. 

(Updates with shares reaction in third paragraph)

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