The TIM, Elliott and Vivendi spat escalates to pugilistic levels

The fight for the soul of Italian telco TIM, between French conglomerate Vivendi and the UK arm of US activist investor Elliott, is getting tasty.

If you Google TIM and Elliot you the top listings all refer to a mixed martial arts fighter. This seems amusingly appropriate given the increasingly combative nature of their dispute ahead of the TIM AGM next week. Two days ago Vivendi published a defence of its influence over TIM, which was followed up by a TIM investor presentation effectively endorsing Vivendi’s approach and rejection Elliott’s.

Elliott wasn’t about to take this coordinated ground-and-pound lying down and today published a counter-punch of its own, in the form of a detailed dissection of Vivendi’s public statement. In total 17 Vivendi statements are critiqued, with the predictable aim of discrediting them. Here are some of the highlights.

Vivendi: “Telecom Italia had lost more than 70% of its market value in the previous ten years before Vivendi came on board.”

Elliott: The negative trend in TIM’s stock price performance has accelerated since Vivendi nominees joined the Board in December 2015. In a little over two years, TIM’s stock has fallen more than 35%.

“As the main shareholder in Telecom Italia, Vivendi can provide stability and expertise while enabling other shareholders to invest and participate in the future upside.”

It appears that Vivendi’s approach to telecom assets in the past (SFR, GVT, Maroc Telecom) has been to trade these businesses rather than to promote investment stability through long-term stewardship.

“We have proposed a slate of candidates for the Board who are fully supportive of the management team and their approach.”

Elliott, along with proxy advisors Glass Lewis, ISS and Frontis Governance, believes its slate to be a material improvement to that put forward by Vivendi, in terms of credibility, suitable experience and the support it can provide the management team.

“In drawing up that slate we have listened attentively to the views of others.”

Vivendi may have listened to the views of others but it has evidently ignored them: Vivendi has presented mostly the same directors who resigned in March 2018, including those whom they claim to be independent.

Of course writing a hit piece to pick apart your opponent’s argument is one thing, convincing shareholders is quite another. It has now come to the stage that it’s difficult to take anything any of the interested parties have to say at face value as everything published is entirely committed to the strategy of gaining control of the TIM board.

Vivendi wants the world to believe it is committed to the long term health and growth of TIM as part of its pan-European multiplay strategy, while Elliott seems to want to convince shareholders that Vivendi’s moves to control the company despite only being a minority shareholder itself run contrary to their interests. Everyone seems to have thrown their best shots now and it will all come down to the judges’ scorecards at the TIM AGM main event.

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