Vivendi scorns activist attempt to unseat six TIM directors

16 March 2018 | Alan Burkitt-Gray

Vivendi, the biggest shareholder in TIM, has condemned a move by an activist investor to replace six directors with its own nominees.

US group Elliott Management, which represents owners of more than 5% of shares in the former Telecom Italia, wants Vivendi CEO Arnaud de Puyfontaine, who chairs the TIM board, and five colleagues to be deposed on 24 April. 


Vivendi, which owns "close to 25%", disputed the 5% claim and said "Elliott Management, a hedge fund well-known for its short termist initiatives, … currently owns 3% of Telecom Italia shares". The French media group added that Elliott owns "other unknown and undisclosed financial instruments". But it said it will examine Elliott’s comments "with an open mind".

TIM said the letter from Elliott Management, representing shareholders Elliott International LP, Elliott Associates LP and The Liverpool Limited Partnership, asked for the motion to be added to the agenda of the shareholders’ meeting that had already been called for 24 April.

The Elliott motion asked for the role of six TIM directors to be revoked: de Puyfontaine as well as Hervé Philippe, Frédéric Crépin, Giuseppe Recchi, Félicité Herzog and Anna Jones.

Elliott’s letter to TIM complained of "poor stewardship under the Vivendi-controlled board has resulted in deeply troubling corporate governance issues, a valuation discount and no clear strategic path forward." The letter added: "We strongly believe that there could be material upside for shareholders if an independent board were to take steps to improve strategic direction and governance."

Vivendi retorted: "However it is not sure that the plan to dismantle the group and destabilise the teams will create value, whereas the industrial plan presented by Amos Genish (a recently appointed telecoms specialist, with an outstanding international reputation) and his teams is strong and promising for the future. The initiatives taken these last quarters have already borne fruit and been welcomed by investors."

TIM’s board has approved plans to create a separate legal entity that will own its fixed network. The new wholesale company, Netco will own the access network from the exchange up to customers’ homes and all the infrastructure, including buildings, electronic equipment and IT systems.

Last week the board gave Genish the power to start the formal procedure to notify Italy’s telecoms regulator, Agcom, of its "request for a voluntary separation of its fixed access network". The company said that Netco "would be a 'one-stop-shop’ access point for regulated and unregulated wholesale services for all operators including TIM, delivering a fully neutral and equivalent model".

Italy is still without a government, following inconclusive elections earlier in March – potentially leaving Agcom with the task of making a significant decision about the country’s strategic telecoms infrastructure without ministerial guidance.

The previous government was concerned that TIM’s national and international infrastructure, including that operated by Sparkle, would be under foreign control. The Netco suggestion would not address that, as the proposal is for Netco to be 100% owned by TIM.

Elliott says it will propose six directors for election on 24 April in place of those it wants removing. These are:
  • Fulvio Conti, a former Telecom Italia CFO who has more recently been CEO of Enel, the electricity company that is a shareholder in Open Fiber, the rival infrastructure operator; 
  • Massimo Ferrari, CFO of construction group Salini Impregilo;
  • Paola Giannotti De Ponti, a banker with UBI Banca who has previously worked at Morgan Stanley, Citigroup, Dresdner Bank and BNP Paribas – where she was responsible for Telecom Italia among other clients; 
  • Luigi Gubitosi, head of corporate and investment banking for Italy at Merrill Lynch; 
  • Dante Roscini, a banker who is now a member of the business, government, and the international economy unit at Harvard Business School; and
  • Rocco Sabelli, former general manager of TIM who was CEO of Alitalia until 2013. 


Topics: TIM, Telecom Italia, Sparkle, Vivendi, Elliott, Puyfontaine, network separation, Open Fiber, Enel