Exclusive: TIM confirms CEO met Open Fiber CEO to discuss network merger
06 February 2019 | Alan Burkitt-Gray
Luigi Gubitosi, CEO of TIM, and Elisabetta Ripa, CEO of Open Fiber, met yesterday to discuss a possible merger of their national fibre networks, TIM has told Capacity.
Open Fiber is a wholesale-only operator building a nationwide fibre network. Ripa, who has been CEO since the start of 2018, is a former TIM executive: she was CEO of the international operation, Sparkle, in 2013-14 and went on to run TIM’s former business in Argentina.
A TIM executive told Capacity: “A first meeting took place yesterday between the CEOs of TIM and Open Fiber to explore possible synergies and collaborations between the two groups. The aim of the meeting was to identify the teams that will work together and define an agenda.”
The newspaper La Repubblica suggested that the two CEOs were set “for a long negotiation” before they achieved their goal – something that has been supported by Italian government ministers and, speaking anonymously to Capacity, by executives from the TIM group. Sparkle is not affected by the potential merger, as it operates separately from the national TIM operation. However Sparkle is understood to be looking for external investment in its global network.
Meanwhile Vivendi, TIM’s biggest shareholder, has lost an attempt to move the company’s next shareholder meeting earlier than the planned date of 29 March. The French media company appealed to TIM’s statutory auditors to name an earlier date, but the auditors said the conditions “have not been met”.
Vivendi called last December for five Elliott nominees on the TIM board to be replaced with five of its nominees, including former Telecom Italia CEO Franco Bernabè.
The French media group, which owns 24% but has lost control of the boardroom, said then that the Elliott-nominated board oversaw a “reckless breach of corporate governance rules”. It added that “tensions and conflicts within the board (including within the Elliott candidates) have severely undermined the market’s trust in the ability of TIM’s management body to direct the growth and the development of the company in a medium- to long-term perspective”.
A network separation plan seems inevitable: Bernabè, when he was CEO in the last decade, put a proposal to the then board, though the board rejected it and he resigned. Elliott is known to have recruited advisers than have deep knowledge of network separation.
Elliott announced that it has increased its shareholding in TIM from 8.8% to 9.4% and it is understood that it hopes to increase the stake further.
Elliott said in a filing to the US Securities and Exchange Commission that its stakes include 3.0% held through a Bermuda-registered partnership, The Liverpool Limited Partnership, and a further 6.4% through Elliott International.
Gubitosi, nominated by Elliott, became CEO in November 2018 after the board fired Amos Genish, a former Vivendi executive.
7h | Natalie Bannerman
9h | Abigail Opiah
10h | Abigail Opiah
11h | Abigail Opiah