Vivendi has condemned what it sees as a move by its rival for the control of Telecom Italia (TIM), Elliott Advisors, to take advantage of the ongoing decline in TIM’s share price to acquire more stock.
Responding to an SEC filing that revealed that Elliott has increased its stake in TIM to 9.4%, up from the 8.8% it held in April last year, Vivendi said that Elliott was acting opportunistically to benefit from a fall in the telco’s share price that it had brought about.
Elliott said it its SEC document that TIM share were “undervalued and represent an attractive investment opportunity”.
The hedge fund said that there were “several pathways” to increase shareholder value going forward, including “but not limited to” the “separation of its fixed-line access network (NetCo) and the evaluation of market consolidation operations” as well as the conversion of saving shares to common shares.
Elliott also stated its opposition to Vivendi’s plans to engineer a change in the composition of the TIM board at the forthcoming March 29 shareholders meeting called for by the French media company. The hedge fund said that “any change in composition of the board at this juncture would be detrimental to the execution and delivery of [TIM’s] anticipated value creation plans”.
“Elliott is acting as a pure financial investor, that is to say, using an opportunistic approach to take advantage of the 45% drop in the share price. The share price is currently so low because of Elliott’s own terrible governance since May 4. There is currently no industrial plan,” said a Vivendi spokesperson.
TIM’s new Elliott-backed CEO Luigi Gubitosi, who replaced Vivendi-appointed Amos Genish in a move engineered by Elliott’s board members at the end of last year, is due to unveil a new strategy for the operator on February 21, which could involve the separation of the fixed network.
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