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Vivendi and Elliott have a domestic over the custody of TIM

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French conglomerate Vivendi has pulled its three proxies on the board of Italian operator group TIM, claiming Elliott Management is trying to dismantle it.

By amazing coincidence five other TIM board members have also resigned, which apparently means every board position needs to be reallocated at the next shareholder’s meeting, which has been called for 24 April, although Vivendi seems to think it’s in May. All very confusing, but then this kind of corporate dicking about usually is.

“In light of the attempt led by hedge-fund activist Elliott Management, well-known for its track record of short-termist initiatives, to dismantle Telecom Italia (TIM), the three members of the TIM Board of Directors representing Vivendi, which supports the unanimously approved industrial plan led by Amos Genish and his team, have decided to resign from the Board,” said the Vivendi announcement.

Elliott wasn’t about to let that kind of slur go unchallenged and issued the following riposte: “Given the momentum behind Elliott’s campaign at Telecom Italia to improve both performance and governance, Elliott was not surprised to see yesterday’s resignation of seven board members affiliated with Vivendi.” So they can neither agree on dates or numbers – nice.

“Unable to advance any meritorious arguments, the board has simply abandoned their posts to stall for time,” continued the Elliott statement. “Elliott regards this action as cynical and self-serving, in that it delays the ability of Telecom Italia shareholders to express their votes at the upcoming AGM.

“This is yet another example of minority shareholder rights at Telecom Italia being abrogated and the continued disregard of corporate governance best practice. Finally, Vivendi should note Elliott’s forty-year track record of consistent value creation, and sustained, long-term commitments to expose poor governance and catalyse positive change; Elliott’s investment history in Telecom Italia dates back to 1999, well before Vivendi became a shareholder in the company.”

TIM’s formal response addresses the numerical discrepancies in the two previous statements. Apparently Elliott wanted the meeting on 24 April, but all these resignations have forced the postponement to 4 May. Furthermore Executive Deputy Chairman Giuseppe Recchi had already bailed before the meeting at which the other seven handed in their notice.

All this apparently sets us up for a big proxy showdown on 4 May when Vivendi and Elliot will furiously lobby TIM shareholders (minimum 0.5% of voting capital) to appoint their representative to the board. How this tug of love over Italy’s biggest telco will play out after that is anyone’s guess.


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