TIM succumbs to Stockholm Syndrome

Telecom Italia has sent a document to the Italian government stating it does not believe Vivendi has been up to anything dodgy during its pursuit of influence at the telco.

The Italian government is currently investigating the situation to see whether the French group has broken the law in terms of notifying the government with any significant changes at strategic assets. Vivendi has owned a 24.9% stake in TIM since March 2006, an amount just below the threshold to force a formal take-over bid in Italy. According to Reuters, TIM believes everything is above board.

“The actions taken… do not constitute events requiring any need of notification and are not susceptible to triggering the use of any veto power,” the document reads. was not able to determine whether the statement was made under duress, whether the TIM management team is developing some sort of affection towards its captives, or whether it genuinely believes the statement, but you have to wonder what is next in this little saga.

Vivendi has stated it doesn’t have de facto control over the business, TIM says it’s alright with the situation and the European Commission has also stated it doesn’t believe there is anything counterproductive going on. Italian and French regulators can scrutinize the set-up as much as they like, but unless anything ground-breaking comes up, it doesn’t look like anything is going to change.

The issue here from the Italian government’s perspective is that of infrastructure deemed of critical importance to the country. Under Italian law, companies are obliged to notify the government of changes in control of assets which are of strategic importance. This would usually mean a change in leadership, strategic direction or an acquisition, but in TIM, this is a unique situation.

The boardroom is packed with Vivendi friendlies, the Vivendi CEO is Interim CEO and also Executive Chairman, and Vivendi’s Chief Convergence Officer is now General Manager for Operations at TIM. All of this, while only owning 24.9% of the company and not having to make a formal take-over bid. But of course, this doesn’t mean anything suspect is going on.

Ultimately, the Italian government wants to maintain some level of control over the telco, which could prove difficult should orders be coming from another country. What is quite interesting is a slight omission of control and influence, which Vivendi has been keen to downplay in recent months.

The document states Vivendi’s influence is on the management of the company, and does not result in any change of ownership or control over TIM or its assets. It’s a highly nuanced area, with a lot of interpretation and grey areas, but this is a quite different stance from one which was taken a couple of months ago.

Perhaps Vivendi has realized it cannot continue the previous rhetoric considering the evidence. Some might also question whether there is any difference between controlling the management team and controlling the direction or assets of the business. Vivendi states they are two different things, but are they?

Whether this pokes the boresome bureaucratic bear in Brussels out of its long summer slumber remains to be seen, but there might be a few people interested in the set-up once again. It’s only a small concession from Vivendi, but one which could prove to be quite important.

There will probably be a lot of talking, a lot of back and forth, then someone will go for lunch for a few hours, and the situation will probably blow over. Isn’t that what usually happens?

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