Italian markets regulator Consob told the French company to issue a statement about whether or not it controlled TIM in a press release by close of business on Monday.
It did, just. The company circulated the release by email at 18:44 French and Italian time.
Vivendi based its conclusion on the fact that “its participation in Telecom Italia is not sufficient enough to allow it to exercise, on a stable basis, a dominant influence at Telecom Italia shareholders’ meetings”.
With a 24% stake, Vivendi is the largest shareholder in TIM. In March 2016 it owned 24.9%, just a fraction below the 25% level at which, under Italian law, it would have had to make a formal takeover offer.
In April this year its influence over TIM was such that it was able to nominate a slate of people to the Telecom Italia board, including Franco Bernabè, the former CEO.
Nominees included Arnaud de Puyfontaine, the CEO of Vivendi, along with its CFO, Hervé Philippe, and its general counsel, Frédéric Crépin. De Puyfontaine then became deputy chairman of TIM but by June chairman Giuseppe Recchi had been demoted to deputy and the Vivendi CEO had taken over the lead role.
Later in June telecoms and media regulator Autorità per le Garanzie nelle Comunicazioni (Agcom) said it was concerned that Vivendi was not only the dominant shareholder in TIM but also a 28.8% shareholder in Mediaset, Italy’s biggest broadcaster. (It’s not the biggest: that role is held by the family of Silvio Berlusconi, the former Italian prime minister.)
Choose between one or the other, said Agcom. So far, it seems, Vivendi has ignored Agcom. It still owns 24% of TIM and 28.8% of Mediaset.
Meanwhile, in the background, was Amos Genish. He had a good record of founding Brazilian operator GVT. Vivendi bought it and later sold it to Telefónica, which made Genish CEO of Telefónica Brasil. He left that post last year and in January 2017 became chief convergence officer of Vivendi, based in Paris and London.
Now Genish is general manager for operations at TIM, effectively running the company. The previous CEO, Flavio Cattaneo, negotiated a €25 million deal to leave – and departed as Vivendi’s nominee Genish took over.
TIM, in a rare declaration of independence from Vivendi, paid Cattaneo an extraordinary tribute, in addition to the €25 million. He had, they said, produced a “major and extraordinary turnaround of the business” in just over a year.
“Positive quarterly reports, positive on every line” showed that he had achieved “a major reorganisation of internal processes, efficiency plans on non-core costs, and revenue plans, which saw company increase its customers and revenues to levels not reached in the last 10 years”.
At the same time TIM’s board of statutory auditors clearly said in a statement they were “non-favourable” to Catteneo’s removal.
That was the last statement out of the TIM management that has questioned Vivendi’s activities since it became the biggest shareholder two years ago – when it took over the holding from Telefónica as part of the GVT deal in Brazil.
But, in its statement last night, Vivendi assures Consob, the Italian financial regulator, that “all empirical data – including attendance at the ordinary shareholders’ meetings” since it acquired its stake “unequivocally reveal that Vivendi is not in a position to control Telecom Italia ordinary shareholders’ meetings”.
The last ordinary shareholders’ meeting was on 4 May, when shareholders approved Vivendi’s raft of nominees to the board, including Bernabè. The next, in the ordinary course of events, will be in May 2018.
If there isn’t shareholder control, is there financial control? No, again, says Vivendi. It does not “have the power to govern Telecom Italia’s financial and operating policies, according to IFRS 10”, says the French group, adding: “The French and Italian markets will be duly informed should Vivendi come to a different conclusion, which is not expected at this stage, in connection with Vivendi’s consolidated financial statements to be published for the first half of 2017.”
Vivendi is now in a quiet period, ahead of publication of its first-half figures on 31 August. Expect those results, when they are revealed, to be read closely in Rome.
