Vivendi’s control over Telecom Italia (TIM) is being challenged after an activist investor launched an effort to unseat its representatives from the operator’s board.
Elliott Management sent an open letter to TIM shareholders calling for six representatives to be replaced, including Arnaud Roy de Puyfontaine, Chairman of TIM and CEO of Vivendi.
Other board members in the crosshairs include Vivendi’s CFO Hervé Philippe, its General Counsel Frédéric Crépin, and Giuseppe Recchi, the Deputy Chairman of the operator who announced his departure from the telco last month.
In their place, Elliott hopes to install a team of executives from the financial sector, including former TIM CFO Fulvio Conti.
The vote will be taken at TIM’s shareholder meeting on 24 April.
In an emailed statement, Elliott Management said it believes TIM “is uniquely positioned in the Italian market and operates an outstanding collection of assets that, if properly managed, should produce substantial, consistent returns for its shareholders while providing a vital, high-quality public service”.
It accused the current Vivendi-controlled board of “poor stewardship” which had resulted in “deeply troubling corporate governance issues, a valuation discount and strategic failures”.
As examples, it cited what it said were conflicts of interest, including awarding advertising contracts to Vivendi businesses, as well as TIM’s strategy to hold onto the divested infrastructure company NetCo.
“Elliott believes a truly independent board is now required to improve both governance and performance at TIM,” it said.
The turmoil at TIM is the latest example of Vivendi's fraught position as the Italian telco's majority shareholder.
Previous CEO Flavio Cattaneo left TIM in July after reportedly falling out with the France-based media group.