Besieged operator Telecom Italia has been forced to admit it is in negotiations with CEO Marco Patuano over the terms of his expected resignation.
It is very likely to be a coincidence that this development comes just a week after French conglomerate Vivendi increased its stake in the company to 24.9% – just short of the proportion that would oblige it to make a formal takeover bid.
The news had been widely leaked over the weekend, with the FT claiming Patuano wants €7 million to walk away quietly, apparently prompting the Italian financial market regulator CONSOB (Commissione Nazionale per le Società e la Borsa), to ask Telecom Italia to say something.
“Upon Consob’s request Telecom Italia announces that negotiations are ongoing with the Chief Executive Officer aimed at the definition of an agreement – to be submitted to the relevant corporate bodies – on the consensual suspension of the offices held by the CEO within the Group,” said TIM. “At present no communication about resignation or surrender of the office has been presented.”
Vivendi has been actively pursuing greater control of TIM for some time. At a recent AGM Vivendi scored a major victory over the incumbent TIM administration by winning support to install four of its representatives, including CEO Arnaud de Puyfontaine, on the board. A sufficient proportion of other TIM shareholders are apparently convinced their interests are better served by letting Vivendi run the company without even bothering to own it and it’s reasonable to expect the new TIM CEO to be more compliant than TIM lifer Patuano has been.
UPDATE – 13:30 21/3/16: TIM has issued this follow-up announcement: “Telecom Italia announces that Chief Executive Officer Marco Patuano today handed in his resignation, which will become effective subject to the relevant corporate bodies’ approval of the pertaining terms and conditions. Marco Patuano qualifies as non-independent executive director; as of today’s date, he owns 70.000 ordinary shares and 30.000 savings shares in Telecom Italia S.p.A.”
UPDATE 2 – 09:30 22/3/16: TIM has confirmed Patuano’s compensation for resigning is €6 million.