US activist investor Elliott Management has formally submitted a request to Telecom Italia (TIM) to include a proposal to remove Vivendi-nominated members from the telco’s board when TIM shareholders meet on April 24.
Elliott has called for six directors – TIM chairman Arnaud de Puyfontaine, Hervé Philippe, Frédéric Crépin, Giuseppe Recchi, Félicité Herzog and Anna Jones – to be revoked and for independent directors to be nominated in their place. Elliott’s six nominees are Fulvio Conti, Massimo Ferrari, Paola Giannotti De Ponti, Luigi Gubitosi, Dante Roscini and Rocco Sabelli.
The hedge fund has stopped short of calling for Vivendi-nominated CEO Amos Genish to be removed.
Responding to the move, Vivendi said it would “examine with an open mind the comments made by Elliott Management, a hedge fund well-known for its short termist initiatives, and which currently owns 3% of Telecom Italia shares, alongside other unknown and undisclosed financial instruments”.
Vivendi said it was “not sure” that Elliott’s plan “to dismantle the Group and destabilise the teams will create value”, arguing instead that “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”.
Vivendi said that initiatives taken in recent quarters “have already borne fruit and been welcomed by investors”.
Elliott meanwhile is attempting to garner support from other TIM shareholders, writing to them with a call for an independent board to improve the performance of the group.
Elliott wants a new board to convert TIM’s saving shares – which do not carry voting rights – into ordinary shares. It has also called for a separate listing or partial sale of the new infrastructure company TIM has committed to set up to meet the demands of the Italian government under its ‘golden power’ to intervene in cases where it felt strategic national assets were threatened by foreign ownership.
Vivendi saw off a threat to convert savings shares into ordinary shares three years ago, when it succeeded in pushing through a proposal to increase the size of the Telecom Italia board to bring in Vivendi executives including De Puyfontaine, Philippe and Herzog.
Elliott also wants to resume the immediate payment of dividends, something that is opposed by the company’s management.
TIM’s board recently approved a 2020 strategic plan that calls for an expansion of its TIMVision on-demand service and moves to expand its converged subscriber base, but did not mention an aborted attempt to create a content joint-venture with Canal+, which was widely seen as likely to play a key role in any solution to Vivendi’s long-running dispute with Italy’s Mediaset.
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