23 March 2018
| Alan Burkitt-Gray
Battle has started over the future of Telecom Italia between two of its biggest shareholders.
The dispute effectively leaves the company, now called TIM,
leaderless from 24 April until a shareholders’
meeting on 4 May, when Vivendi, which owns 24%, and a US-based
activist investor with 5.75%, fight it out.
The move may lead to a completely new management and board in
charge of TIM, perhaps leading to a complete restructuring of
the group, which owns operations in Italy and Brazil and the
international carrier Sparkle.
Battle lines were drawn up last night when most of the TIM
board resigned, with their resignations effective on 24 April.
This was a response to a move by Elliott Management to unseat
Vivendi CEO Arnaud de Puyfontaine, who chairs the TIM board,
and five colleagues, and replace them with their own
It will not be a case of 24% against 5.75%, but of how the
other 70% or so votes – in favour of French media
company Vivendi or in favour of Elliott, which wants to break
up the company.
The Bloomberg news agency said overnight that "a person
familiar with the matter … who asked not to be
identified" told it that Elliott "has spoken to dozens of
potential candidates [for board positions] who are willing to
put their name on its proxy and plans to run its slate against
Vivendi’s at the meeting".
The directors who have resigned are de Puyfontaine himself plus
Camilla Antonini, Frédéric Crépin,
Félicité Herzog, Anna Jones, Marella Moretti and
Hervé Philippe. In addition deputy chairman Giuseppe
Recchi had already resigned to take up a new job, as CEO of a
Netherlands healthcare group.
Recchi’s position in charge of TIM’s
strategic assets, including Sparkle, has been taken up by
Franco Bernabè – a former CEO of Telecom Italia
who returned to the board last year. The Italian government
required an Italian citizen – Recchi and now
Bernabè – to be in charge of critical national
Earlier in the month Elliott said it would propose six
directors for election on 24 April in place of those it wants
removing. Last night’s decision means that that
shareholders’ meeting has been postponed until 4
Vivendi said Elliott was "well known for its short-termist
initiatives" and condemned what it called an attempt "to
dismantle" the company.
De Puyfontaine said that on 4 May "shareholders will have the
opportunity to choose between an industrial plan able to create
value in the long term, and a programme of short sighted