Vivendi wants four seats on Telecom Italia board as shareholder contention feared

Telecom Italia’s top shareholder Vivendi has demanded four seats on the telco’s board as the strategy of the telecoms group could become a point of contention among shareholders.

In a statement released by Telecom Italia on November 15th, it announced that it had received a ‘request to supplement the agenda of the Meeting of the Ordinary Shareholders, called for 15 December’.

The statement outlined the details of the request from Vivendi, which included a call to redefine the number of members of the Board of Directors of the Company, increasing it from 13 to 17. It also called for the appointment of Vivendi’s Arnaud Roy de Puyfontaine, Stephane Roussel, Hervé Philippe and consultant Felicité Herzog as new directors of Telecom Italia.

French Media Vivendi owns just over 20% of Telecom Italia but another major shareholder could threaten the OTT ambitions of the content publisher. French tycoon Xavier Niel, the second biggest shareholder, holds securities giving him an 11% voting stake in Telecom Italia through his personal investment company. Niel was the founder of broadband provider Iliad SA and is known for pursuing aggressive price competition. In France, Iliad changed the dynamics of telecoms industry by slashing mobile tariffs, sparking a price war that led to firings, restructuring and asset disposals at rivals such as SFR and Bouygues Telecom.

A race to the bottom on subscription charges might not suit Vivendi, which is executing a plan to create a media group that collaborates with carriers to help it distribute TV series and movies.

Telecom Italia is the biggest mobile and broadband carrier in country of 60 million people and was controlled by Italian financial investors and Spain’s Telefonica until the latter sold its shares to Niel. According to reports in Bloomberg, Telecom Italia CEO Marco Patuano wants to revive the company’s local business and sell asset to reduce a debt load of almost 27 billion euros.

According to Bloomberg Telecom Italia was a candidate for takeover in a wave of European telco mergers and acquisitions ‘well before Bollore and Niel’s entry’. In March Stephane Richard, CEO of Orange France said Telecom Italia could be ‘a great opportunity for European consolidation. Orange is also a business partner for Niel’s company Iliad, after a roaming agreement in 2011 gave it license to sell wireless packages before building its own network.

Leave a comment

Your email address will not be published. Required fields are marked *

This site uses Akismet to reduce spam. Learn how your comment data is processed.