Vivendi, which owns 24% of the former Telecom Italia, had been ready to support a motion to unseat Gubitosi and four other directors, all of whom were nominated last year by US-based activist investor Elliott.
“We are prepared to give credit to the CEO,” said the French media company’s head of legal affairs, Caroline Le Masne de Chermont. Gubitosi had appealed to Vivendi that shareholders should work together.
“Accordingly, following his suggestion, Vivendi has decided not to pursue today its proposal to revoke and replace five Board members, provided that this has the support of the shareholders’ meeting,” said Le Masne de Chermont.
Vivendi withdrew its resolutions to revoke and replace the five board members.
Le Masne de Chermont said Vivendi is “prepared to give credit” to Gubitosi, who was appointed to the top position last year in place of Amos Genish, a former Vivendi executive.
She explained: “As publicly known, Vivendi has invested €4 billion in TIM. As a long-term industrial shareholder, Vivendi sees a lot of potential for the company and has always expressed its willingness to establish the best conditions to restore value at Telecom Italia.”
She added: “Vivendi is more interested than any other shareholder in re-establishing an harmonious and collegial board governance that supports the management in conceiving and implementing value creation plans, in the interest of the company, its shareholders and its employees.”
She said that Vivendi had wanted “a change of governance, because what happened in and around the board since last May [2018] has affected the stock price, and the whole functioning of the company”.
But, she said, “there is no point in revisiting here and now the events of the last year, particularly those that cannot be changed. Let’s focus instead on the changes we would like to see in the near future.”
She appealed to the board of TIM “to be more reflective of the company’s shareholder base and to be led in an independent, transparent and fully inclusive manner”.
Elliott has just under 10% of the shares in TIM. Cassa Depositi e Prestiti (CDP), the Italian state investment bank, has around 10% and is also a 50% shareholder in rival wholesale network company Open Fiber.
Le Masne de Chermont said that Vivendi would leave the next stage “in the hands of board members and their individual conscience”.
She added: “What we can say is that if change does occur as the CEO announced, he can count on our loyal and stable support as the company’s largest shareholder.”
