In March activist fund Elliott called for six board members to resign at the April 24th shareholder's meeting of Telecom Italia (TIM), and proposed its own replacements for those it considered to be working in the interests of Vivendi, TIM's largest shareholder with a 24 percent stake.
However on March 22nd eight members of the TIM board announced their resignations and another shareholders meeting was called for May 4th to elect a new board.
Asked by daily La Stampa about the prospect of Elliott weakening Vivendi's control of TIM at the meeting, CEO Amos Genish said: “It's not realistic.”
“We've got a good strategic plan and investors know this. I've met 120 in the last few weeks, and they ask for management continuity,” he added.
Sometimes called a “vulture” fund, Elliott has regularly invested in companies in difficulty or whose shares it considers undervalued, and often engages in showdowns with those companies' management.
During March's salvo against TIM's management it said that it had an around five percent stake in TIM, but daily La Repubblica claims that Elliott nows holds 9.9 percent, citing “financial sources”.
Like many other former state monopoly operators TIM has had trouble in the face of heightened competition and rapid technological change.
Elliott blasted the 35 percent drop in the value of TIM's share price from when “Vivendi nominees” joined the board in December 2015 to “the day before our interest in the company was made public”.
Israeli Genish, appointed last year as TIM's third CEO in as many years, is close to Vivendi's billionaire owner Vincent Bollore and insisted to La Stampa that the French company wasn't going anywhere.
“They have good intentions, a long-term industrial strategy and are ready to invest,” he said.
“Vivendi is along-term partner for TIM.”
Vivendi has de-facto control of the company thanks to its stranglehold on board and executive positions.
Among those who quit was executive chairman Arnaud de Puyfontaine, who is also Vivendi's CEO, and whom Elliot had sought to remove.
Genish said that de Puyfontaine will be candidate for chairman when Vivendi announces its “strong team” of candidates for the board on April 9th.
By Céline Cornu