Vivendi has secured a reprieve in its battle with US hedge fund Elliott Advisors for control of the future direction of Telecom Italia after a Milan court ruled against allowing Elliott to propose the revocation of Vivendi-nominated directors and their replacement by a new slate to today’s shareholders’ meeting.
Judge Elena Riva Crugnola, in the specialised enterprise division of the Milan court, granted Telecom Italia’s (TIM) motion to stay the resolution adopted by the board of statutory auditors to supplement the agenda for the shareholders’ meeting with Elliott’s proposals.
A further shareholders’ meeting scheduled for May 4 will still take place, where the replacement of the whole board of directors will be put to investors.
Elliott responded to the ruling by predicting that it would merely push back the day of reckoning until the May meeting. The hedge fund said it “believes today’s ruling is merely democracy delayed, not democracy denied; shareholders will get to express their will at the EGM on May 4.”
In March, Vivendi’s board representatives, including chairman Arnaud de Puyfontaine, resigned en masse, triggering a re-election process that also delayed the vote on the make up of the board until the May 4 meeting. Elliott subsequently succeeded in securing a vote at the April 24 meeting on the replacement of Vivendi’s board representatives and the appointment of six new independent directors after TIM’s board of statutory auditors added the item to the agenda for the meeting. The court has now overturned this.
Vivendi and Elliott have proposed rival slates of candidates for the board as they battle to control the future direction of the company. Vivendi claims that its ‘industrial strategy’ based on convergence will secure the future of TIM, while Elliott has called for the break-up of the company and the ‘unlocking’ of value to shareholders, and accused the French media company of acting in its own interests, rather than those of TIM shareholders.