French media group Vivendi has expressed alarm at what it sees as the “disastrous” performance of Telecom Italia (TIM) since the boardroom coup engineered by private equity outfit Elliott earlier this year that saw Vivendi lose control of the company, in which it remains the largest shareholder.
In a statement, Vivendi said it is “deeply concerned by the disastrous management of Telecom Italia since Elliott took control of its board following the May 4, 2018 shareholders meeting”.
Vivendi cited the fact that TIM’s share price had fallen by 35% since Elliott’s victory in the battle for control of the telco, its lowest level in five years. Elliott had promised that ousting Vivendi from control of the operator would result in a doubling of the group’s share price over two years.
Vivendi said that “the new governance team is failing”, with the spreading of rumours, including about the departure of CEO Amos Genish, a Vivendi appointee, was “causing dysfunction” that is harmful the smooth running of the company and its performance.
Vivendi said it “remains convinced of TIM’s significant development potential”.
Vivendi had already expressed concern about the direction of TIM under Elliott’s leadership in June.
TIM president Fulvio Conti rejected Vivendi’s assertions as “absurd and unfounded” and said that the group’s management had continued to execute the strategic plan put in place by Vivendi in the first place.
While TIM’s share price has fallen further, other Italian telcos have also seen their stock price tumble in recent months. The period has also seen the launch of Free’s mobile service in the Italian market, which has had a significant disruptive impact.