The dispute effectively leaves the company, now called TIM, leaderless from 24 April until a shareholders’ meeting on 4 May, when Vivendi, which owns 24%, and a US-based activist investor with 5.75%, fight it out.
The move may lead to a completely new management and board in charge of TIM, perhaps leading to a complete restructuring of the group, which owns operations in Italy and Brazil and the international carrier Sparkle.
Battle lines were drawn up last night when most of the TIM board resigned, with their resignations effective on 24 April. This was a response to a move by Elliott Management to unseat Vivendi CEO Arnaud de Puyfontaine, who chairs the TIM board, and five colleagues, and replace them with their own nominees.
It will not be a case of 24% against 5.75%, but of how the other 70% or so votes – in favour of French media company Vivendi or in favour of Elliott, which wants to break up the company.
The Bloomberg news agency said overnight that “a person familiar with the matter … who asked not to be identified” told it that Elliott “has spoken to dozens of potential candidates [for board positions] who are willing to put their name on its proxy and plans to run its slate against Vivendi’s at the meeting”.
The directors who have resigned are de Puyfontaine himself plus Camilla Antonini, Frédéric Crépin, Félicité Herzog, Anna Jones, Marella Moretti and Hervé Philippe. In addition deputy chairman Giuseppe Recchi had already resigned to take up a new job, as CEO of a Netherlands healthcare group.
Recchi’s position in charge of TIM’s strategic assets, including Sparkle, has been taken up by Franco Bernabè – a former CEO of Telecom Italia who returned to the board last year. The Italian government required an Italian citizen – Recchi and now Bernabè – to be in charge of critical national assets.
Earlier in the month Elliott said it would propose six directors for election on 24 April in place of those it wants removing. Last night’s decision means that that shareholders’ meeting has been postponed until 4 May.
Vivendi said Elliott was “well known for its short-termist initiatives” and condemned what it called an attempt “to dismantle” the company.
De Puyfontaine said that on 4 May “shareholders will have the opportunity to choose between an industrial plan able to create value in the long term, and a programme of short sighted financial engineering”.
